.USINESS 

i.-isrHors 


ill  ill 


iii  i!  i 


HET;RY 


MODERN 
BUSINESS    METHODS 


MODERN 
BUSINESS  METHODS 


BY 

WILLIAM  P.  TELLER,  Credit  Man  and  Accountant,  the  Illinois 

Envelope  Company,  Kalamazoo,  Michigan,  and 

HENRY  E.  BROWN,  formerly  Head  of  the 

Commercial  Department  of  the 

Rock  Island,  Illinois, 

High  School 


RAND,  McNALLY  &  COMPANY 

Chicago  New  York  London 


A  FIRST  BOOK  IN  BUSINESS  METHODS 

Copyright,  1903, 
By  WILLIAM  P.  TELLER  and  HENRY  E.  BROWN 

Copyright,  ion, 
By  WILLIAM  P.  TELLER  and  HENRY  E.  BROWN 

MODERN  BUSINESS  METHODS 

Published,  igiz 
Copyrighted  under  above  titie 


EJjECTROTYP$D.fc.$TD  FJIINTJED  BY 


,  "JJ/S  .*«  A 


THE   PREFACE 

IN  the  preparation  of  this  work  an  effort   has   been  made  to 
present,  in  a  clear  and  simple  manner,  practical  information 
pertaining  to  everyday  business  transactions.     The  design  has 
been  to  prepare  a  book  which  would  serve  as  a  guide  in  ordinary 
business  matters,  one  that  would  enable  those  seeking  information 
regarding  modern  business  methods  to  obtain  the  knowledge  desired 
without  having  to  search  through  a  whole  library  to  find  it. 

It  is  believed  that  there  is  a  demand  for  such  a  book  and 
that  the  work  will  be  found  both  interesting  and  useful  to  a  large 
class  of  people  who  desire  to  become  familiar  with  modern  ways  of 
doing  business.  The  intention  has  not  been  to  cover  all  lines 
of  business  but  only  to  include  the  facts  which  every  business  man 
should  know. 

The  authors  acknowledge  their  indebtedness  to  Professor 
Henry  Rand  Hatfield,  Dean  of  the  College  of  Commerce  and 
Administration,  The  University  of  Chicago,  and  Donald  L.  Morrill, 
Attorney  at  Law,  Chicago,  for  reading  this  book  in  manuscript, 
and  for  many  valuable  suggestions. 

W.  P.  T. 
H.  E.  B. 


291490 


THE  TABLE  OP  CONTENTS 


PAGE 

The  Preface     .     .          -. 5 

Chapter         I.      Letter  Writing 1 1 

Chapter       II.      Bills,  Invoices,  Statements  of  Account, 

Receipts 34 

Chapter     III.      Banking 53 

Chapter     IV.     Promissory  Notes,   Interest,  Bank    Dis- 
count, Partial  Payments 77 

Chapter       V.      Drafts 106 

Chapter     VI.     General  Postal  Information,  Post  Office 
Money  Orders,  Express  Money  Orders, 

Letters  of  Credit 116 

Chapter   VII.     Petitions,  Power  of  Attorney,  Commercial 

Agencies,  Miscellaneous 132 

Chapter  VIII.     Railroad  and  Express  Business  ....  147 

Chapter     IX.     Contracts,  Leases,  Guaranties,  Bonds  .     .  162 

Chapter       X.      Merchandise  Sales,  Stocks  and  Bonds  .     .  182 

Chapter     XL      Partnership,  Insurance  . 196 

[7] 


8 


THE  TABLE  OF  CONTENTS 


Chapter    XII.     Deeds,  Mortgages 213 

Chapter  XIII.      United  States  Land  Surveying  ....  234 

Chapter  XIV.     Wills,  Settling  of  Estates 241 

A   List  of  Signs,  Abbreviations,  and  Contractions  used  in 

Business 250 

A  List  of  Commercial  Words  and  Phrases   .          254 

Suggestions  to  the  Teacher 263 

The  Index  .  266 


The  Business  Career 


CAN  confidently  recommend 
to  you  the  business  career  as 
one  in  which  there  is  abundant 
roomfo?  the  exercise  of  man  s 
highest  power,  atd  of  every 
good  quality  in  human  nature.  I  believe  the 
career  of  the  great  merchant,  or  banker,  or 
captain  of  industry  to  be  favorable  to  the 
development  of  the  powers  of  the  mind,  and 
to  the  ripening  of  the  judgment  upon  a  wide 
range  of  general  subjects  ;  to  freedom  from 
prejudice,  and  the  keeping  of  an  open  mind. 
And  I  do  know  that  permanent  success  is  not 
obtainable  except  by  fair  and  honorable  deal- 
ingt  by  irreproachable  habits  and  correct 
living,  by  the  display  of  good  sense  and  rare 
judgment  in  all  the  relations  of  human  life, 
for  credit  and  confidence  fly  from  the  busi- 
ness man,  foolish  in  word  and  deed,  or 
irregular  in  habits,  or  even  suspected  of 
sharp  practice.  T£j*£tj*j*j*j*£j*<£& 

—ANDREW     CARNEGIE— 


MODERN 
BUSINESS   METHODS 


CHAPTER  I. 


LETTER  WRITING 

I.  Business  Letters.  Everyone  should  learn  to  write  a 
good  business  letter.  While  it  is  much  easier  for  some  people 
than  for  others  to  express  just  what  they  wish  to  say  in  clear, 
forcible,  grammatical  language,  the  ability  to  write  a  good 
letter  may  be  acquired  by  anyone  who  will  give  the  subject 
sufficient  attention.  A  letter  is  rightly  looked  upon  as  a 
photograph  of  the  character,  ability,  and  culture*  of  the 
writer,  who  is  rigidly  judged  by  his  correspondence.  Careful 
attention  should  be  given  to  punctuation,  the  use  of  capital 
letters,  and  the  proper  construction  of  sentences;  then,  by 
diligent  practice  and  the  study  of  good  models,  anyone  may 
learn  to  write  a  good  business  letter. 

There  are  certain  forms  used  by  business  men  in  the 
arrangement  of  letters,  which  may  be  easily  learned  and 
which  should  be  carefully  observed  in  writing,  as  they  add 
much  to  the  neat  and  orderly  appearance  of  the  letter. 


12        A  FIRST  BOOK  IN   BUSINESS  METHODS 


Notice  the  various  parts  of  a  letter  as  shown  in  the  form 
outlined  below : 

Form  I. 


Heading 


Addr_ess 
Salutation 


Body  of  Letter 


Body  of  Letter 


Complimentary  Clo_se_ 

Signature 


Outline  for  a  Letter 

2.  Paper.  Different  sizes  and  shapes  of  paper  are  used 
for  different  purposes,  but  for  business  purposes,  letter  paper 
about  8  by  10  inches,  or  note  paper  about  7  by  9  inches,  is 
usually  preferred. 

White  paper  is  almost  always  used  in  preference  to  tinted 
paper,  and  white  envelopes  may  be  used  for  all  purposes. 


LETTER  WRITING  13 

There  are  several  separate  and  distinct  parts  to  a  letter,  as 
follows : 

1.  Heading. 

2.  Address. 

3.  Salutation. 

4.  Body  of  the  Letter. 

5.  Complimentary  Close. 

6.  Signature. 

3.  The   Heading.     The  heading  of  the  letter  indicates 
when  and  where  the  letter  was  written ;    i.  e.,  it  gives  the 
address  of  the  writer  and  the  date.     It  should  contain  all  the 
information  necessary  to  enable  the  recipient  so  to  direct  his 
reply  that  there  will  be  no  possibility  of  a  mistake  as  to  where 
the  letter  should  be  sent.     If  the  sender  lives  in  a  city  of  any 
size  the  street  address  should  always  be  given.     The  heading 
should  be  placed  in  the  upper  right-hand  corner  of  the  sheet, 
about  one  and  one-half  inches  from  the  top,  and  should  be 
written  in  a  clear,  plain  hand  so  as  to  be  perfectly  legible. 
Business  men  usually  have  their  letterheads  printed.     The 
heading  may  be  one,  two,  or  three  lines,  never  more  than 
three.    The  heading  of  a  business  letter  usually  occupies  not 
more  than  one  line. 

4.  Punctuation  of  the  Heading.    Care  should  be  taken  in 
the  punctuation  of  the  heading.     A  comma  should  be  placed 
after  the  city,  county,  state,  and  the  day  of  the  month.    A 
period  should  be  placed  after  the  heading  and  after  each 
abbreviation.    Do  not  use  st,  d,  or  th,  in  dates,  if  the  year 
follows  the  day  of  the  month. 

Notice  the  punctuation  of  the  heading  in  the  forms  given 
on  the  following  page. 


14        A  FIRST  BOOK  IN  BUSINESS  METHODS 


DEAR  MR.  SMITH: 
Austin,  Tex. 
DEAR  SIR  : 


Form  II. 
KALAMAZOO,  MICH.,  July  14,  1901. 


Form  III. 

PHOENIX,  ARIZ., 

Aug.  23,  1901. 
MESSRS.  ORMSBY  &  Co., 
New  Orleans,  La. 
GENTLEMEN  : 

Form  IV. 

AGRICULTURAL  COLLEGE, 
LANSING,  MICH., 

July  14,  1901. 
DEAR  MRS.  CHATT: 
Boston,  Mass. 
DEAR  MADAM  : 

5.  The  Address.  The  address  contains  the  name  of  the 
person  to  whom  the  letter  is  written,  with  whatever  titles  he 
may  have,  and  his  residence  or  place  of  business.  It  may 
occupy  two  or  three  lines,  but  two  are  usually  sufficient. 
Street  numbers  are  rarely  placed  in  the  address.  The  city 
and  state  are  placed  on  the  same  line,  immediately  below 
the  name.  Titles  are,  on  account  of  custom  and  politeness, 
given  to  all  persons  to  whom  letters  are  written,  as  "  Miss  " 
or  "  Mrs.,"  "  Mr.,"  "  Messrs.,"  etc.  Oftentimes  these  titles  are 
added  to  names :  "  Esq."  to  that  of  a  lawyer ;  "  M.  D."  to  that 
of  a  Doctor  of  Medicine ;  "  LL.  D."  to  that  of  a  Doctor  of  Laws. 

However  two  titles  of  the  same  class  should  not  be 
added  to  the  same  namej  as  "Mr.  John  Smith,  Esq.," 
"Rev.  Henry  Woodman,  D.  D." 


LETTER  WRITING  15 


6.  The  Salutation.  The  salutation  is  a  term  of  politeness, 
respect,  or  affection  used  in  addressing  the  person  to  whom 
the  letter  is  written.  For  example,  "Sir"  is  a  formal  saluta- 
tion used  chiefly  in  addressing  official  persons.  "Gentlemen," 
"Sirs,"  may  also  be  used.  "Sir"  is  used  in  addressing  a  single 
individual,  and  "Messrs.,"  "Sirs,"  and  "Gentlemen"  in  address- 
ing more  than  one.  Never  abbreviate  "Dear"  to  "Dr.,"  nor 
"Gentlemen"  to  "Gents,"  nor  "Messrs."  to  "Mess."  Do  not 
write  "My  dear  Sir"  with  a  capital  D  in  "dear."  Except  in 
very  formal  letters,  however,  it  is  never  desirable  to  use  the 
salutation  "Sir,"  "Dear  Sir,"  or  "My  dear  Sir."  It  is  always 
preferable  to  use  the  proper  name,  as  "My  dear  Mr.  Smith," 
"Dear  Mr.  Lapham,"  or  "My  dear  Mrs.  Arnold." 

Form  V. 
FRIEND  JONES: 

Your  kind  letter  is  received  and  contents,  etc. 

Form  VI. 

MESSRS.  J.  P.  WOOD  &  Co., 

Birmingham,  Ala. 
GENTLEMEN : 

Your  favor  of  the  i3th  inst,  etc. 

.  Form  VII. 
MR.  E.  STORMS, 

Jacksonville,  Fla. 
DEAR  SIR: 

We  send  you  by  express  to-day  the  goods,  etc. 

Form  VIII. 

MR.  CHAS.  JOHNSON, 

Chicago,  111. 
MY  DEAR  SIR 

In  reply  to  your  favor  of  November  24,  etc. 


1 6       A  FIRST  BOOK  IN  BUSINESvS  METHODS 


7.  The  Body  of  the  Letter.      The  body  of  the  letter  is 
that  portion  which  contains  the  subject-matter  or  the  com- 
munication.    As  time  is  a  matter  of  the  greatest  moment  to 
the  business  man,  a  correspondent  should  make  his  letters 
as  brief  as  possible,  using  as  few  words  as  are  consistent  with 
the  requirements  of  good  English. 

If  the  letter  refers  to  more  than  one  matter  the  points 
should  be  taken  up  in  the  order  of  their  importance,  the 
most  important  first,  and  so  on.  In  writing  a  reply  to  a  letter 
received,  the  same  rule  should  be  followed.  If  the  letter  is 
short,  it  should  occupy  as  nearly  as  possible  the  middle  of 
the  page,  but  whatever  its  length,  care  should  be  taken  to 
leave  enough  space  at  the  bottom  of  the  page  for  the  compli- 
mentary close  and  the  signature. 

8.  Directions.    The  following  directions  with  regard  to 
the  proper  construction  and  composition  of  a  letter  are  of 
great  importance,  and  should  be  noted  with  care : 

1.  A  margin  of  from  one-half  an  inch  to  one  inch  should 
be  reserved  at  the  left-hand  side  of  the  paper,  and  all  lines 
with  the  exception  of  those  commencing  a  paragraph  should 
begin  exactly  at  this  point. 

2.  The  margin  on  the  right  should  be  approximately 
from  one-fourth  to  one-half  an  inch. 

3.  The  punctuation  of  the  body  of  the  letter  should  be 
the  same  as  that  of  any  English  composition.     Do  not  put  a 
period  after  Miss,  ist,  2d,  3d,  4th,  etc.     They  are  not  abbre- 
viations. 

4.  Do  not  write  &  for  and  except  in  firm  names. 

5.  Do  not  abbreviate  the  names  of  cities. 

6.  Do  not  begin  the  names  of  the  seasons  with  capitals. 

7.  Do  not  make  too  many  paragraphs. 


LETTER  WRITING  17 


9.  The   Complimentary  Close.    The   phrase  of  respect, 
courtesy,  or  endearment  written  at  the  end  of  a  letter  is  called 
the  complimentary  close.     The  words  used  vary  according  to 
circumstances. 

The  complimentary  close  of  a  social  letter  may  be  "  Yours 
truly,"  "  Your  friend,"  "  Fraternally  yours,"  "  Yours  as  ever," 
"  Very  sincerely  yours,"  etc.,  and  should  be  in  conformity  with 
the  salutation.  The  forms  most  used  for  business  letters  are 
"Yours  truly,"  "Yours  very  truly,"  "  Respectfully  yours," 
"Very  respectfully  yours,"  etc.  The  complimentary  close 
should  be  written  on  the  next  space  below  the  body  of  the 
letter,  and  should  begin  not  far  from  half  the  distance 
between  the  left-hand  margin  (see  §8)  and  the  right-hand 
edge  of  the  paper. 

10.  The  Signature.    The  signature  is  composed  of  the 
name  of  the  person  or  firm  writing,  and  it  should  be  written 
with  care  so  that  it  may  be  easily  read.     Everyone  should 
adopt  some  form  of  signature  and  always  use  the  same  form 
in  signing  letters  and  all  business  papers.     In  signing  legal 
documents  the  first  name   should  always  be  used,  as,  for 
example,  "John  W.  Green"  rather  than  "J.  W.  Green"  or 
"J.William  Green." 

When  one  person  signs  a  letter  or  business  paper  for 
another,  as,  for  example,  a  clerk  signing  a  firm  name,  he 
should  sign  the  firm  name  and  then,  immediately  below  it, 
should  write,  "  per  -  "  (his  own  name),  in  order  to  indi- 
cate by  whom  the  letter  or  paper  was  signed.  A  comma 
should  follow  the  complimentary  close,  and  a  period  the  sig- 
nature. ^  The  signature  should  end  near  the  right-hand  mar- 
gin of  the  paper.  For  illustration  of  the  preceding,  note  the 
arrangement  in  Form  IX. 


1 8       A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  IX. 

SAN  FRANCISCO,  CAL.,  July  29,  1901. 
MESSRS.  J.  K.  JOHNSON  &  Co., 

City. 
GENTLEMEN  : 

I  have  just  returned  to  the  city,  after  an  absence  of 
several  days,  and  learn  with  much  regret,  from  yours  of  the  nth 
inst,  that  my  note  has  been  protested  for  non-payment. 

I  hasten  to  withdraw  it  from  the  bank,  and  beg  to  say  that  such 
an  oversight  will  not  occur  again. 

Regretting  the  trouble  it  has  caused  you,  I  am, 

Yours  truly, 

F.  O.  ROBINSON. 

11.  Folding.    In  folding  a  business  letter  of  the  usual  size, 
the  first  fold  should  be  from  the  bottom  towards  the  top, 
making  the  fold  nearly  in  the  middle  of  the  sheet.     See  that 
the  edges  are  exactly  even,  then  press  down  the  fold.     Next 
fold  the  right  side  towards  the  center  and  then  the  left  over 
the  right.     The  letter  as  folded  should  be  slightly  shorter 
and  narrower  than  the  envelope.     The  last  two  folds  should 
be  equal.    The  letter  should  be  inserted  in  the  envelope  so 
that  the  loose  edges  will  be  at  the  top  and  back. 

12.  The  Address  Upon  the  Envelope.    In  writing  the 
address  upon  the  envelope  the  name  of  the  person  addressed 
should  be  in  a  straight  line,  and  a  little  below  the  middle 
of  the  envelope.     Care  should  be  taken  to  commence  fat 
enough  to  the  left  so  that  the  blank  spaces  at  either  end  will 
be  about  equal.    After  the  name  should  come  the  ^street 
address,  if  the  residence  of  the  recipient  is  in  a  town  of  any 
considerable  importance.     This  should  be  placed  below  and 
slightly  to  the  right  of  the  name.     The  name  of  the  city 


LETTER  WRITING 


Form  X. 


Forms  of  Address  on  Envelopes 


20        A  FIRST  BOOK  IN  BUSINESS  METHODS 


or  town  should  follow  on  the  next  line,  and  the  name  of  the 
state  should  be  placed  near  the  lower  right-hand  corner.  If 
the  ( name  of  the  county  is  added,  it  is  usually  placed  in  the 
lower  left-hand  corner,  as  is  the  name  of  the  person  in  whose 
care  the  letter  may  be  sent.  The  stamp  should  always  be 
placed  in  the  upper  right-hand  corner.  The  address  of  the 
sender  should  always  be  placed  in  the  upper  left-hand  corner 
to  insure  its  return  should  the  postoffice  authorities  be  unable 
to  find  the  person  to  whom  the  letter  is  addressed. 

13.  Letters  of  Introduction.  Letters  of  introduction  are 
frequently  used  by  business  men  to  introduce  a  friend  to 
some  other  business  man  or  firm.  A  letter  of  this  kind  should 
state  briefly  the  business  of  the  person  introduced  and  give 
such  other  information  regarding  him  as  the  writer  desires. 
It  should  not  be  sealed,  as  it  would  be  very  discourteous  to 
the  person  introduced  not  to  give  him  an  opportunity  to  see 
the  contents  of  the  letter  before  presenting  it. 

The  letter  should  be  so  addressed  that  the  person  receiving 
it  may  know  at  a  glance  that  it  is  a  letter  of  introduction. 

Form  XI. 


An  Addressed  Envelope  of  Introduction 


LETTER  WRITING  21 

Form  XII. 

SEATTLE,  WASH.,  Aug.  14,  1901. 
MR.  GEORGE  L.  SMITH, 

Buffalo,  N.  Y. 
DEAR  FRIEND  : 

This  will  introduce  to  you  Mr.  Isaac  M.  Viele  of  this 
city,  who  is  a  friend  of  mine  and  one  whom  I  know  you  will  be 
glad  to  meet.  He  visits  your  city  for  the  purpose  of  selecting  a 
suitable  location  for  business.  If  you  can  assist  him  in  any  way, 
your  kindness  will  be  appreciated  by  him  and  also  by 

Your  sincere  friend, 

A.  G.  THOMPSON. 

Form  XIII. 

MERIDEN,  CONN.,  Aug.  14,  1901.  . 
MR.  CHARLES  H.  CARTER, 
New  York,  N.  Y. 
DEAR  FRIEND  : 

You  will,  I  am  sure,  be  glad  to  know  my  friend,  Mr. 
George  D.  Johnson,  whom  this  letter  will  introduce  to  you.  He 
visits  your  city  for  the  purpose  of  purchasing  a  stock  of  goods 
for  a  hardware  store  which  he  proposes  to  open  in  this  city  in  the 
near  future.  Any  favors  which  you  can  render  him  will  be 
greatly  appreciated.  Yours  very  truly, 

HENRY  R.  MATHEWS. 

14.  Letters  of  Recommendation.  Sometimes  a  letter  of 
recommendation  is  given  with  a  letter  of  introduction,  but 
not  always.  Letters  of  recommendation  are  sometimes 
addressed  to  a  particular  person  or  firm,  but  usually  they 
are  addressed  in  a  general  way;  as,  "To  whom  it  may  con- 
cern," or  "To  the  public." 

There  are  few  people  who  are  not  called  upon  occasionally 
to  furnish  such  a  letter.  School  officers  are  often  requested 


22        A  FIRST  BOOK  IN  BUSINESS  METHODS 


to  give  a  letter  of  recommendation  to  a  teacher.  Ladies  who 
employ  servants  in  their  homes  are  frequently  asked,  by  those 
who  have  worked  for  them,  for  letters  testifying  to  their  capa- 
bility and  honesty.  Business  men  oftentimes  require  those 
whom  they  employ  to  bring  letters  showing  the  character 
and  ability  of  the  applicant,  and  his  fitness  for  the  position 
which  he  expects  to  fill.  As  letters  of  recommendation  are  so 
common,  it  is  quite  necessary  that  everyone  should  know  how 
to  write  a  letter  of  this  kind.  Care  should  be  taken  not  to  be 
too  extravagant  in  praise  of  the  person  who  is  recommended, 
but  to  simply  state  briefly  his  real  merits  and  capabilities. 

The  form  given  below  will  show  how  a  letter  of  recom- 
mendation is  usually  written : 

Form  XIV. 

BUFFALO,  N.  Y.,  Sept.  i,  1901. 

TO  WHOM  IT  MAY  CONCERN  : 

This  is  to  certify  that  Mr.  Charles  W. 

Thompson  has  been  in  our  employ  during  the  past  three  years. 
He  is  a  reliable  young  man,  faithful  and  industrious  in  his  habits, 
and  we  take  pleasure  in  recommending  him  to  anyone  in  need  of 
such  service  as  he  is  willing  to  undertake. 

Respectfully, 

WM.  B.  WlLBERFORCE  &  Co. 

15.  Directions.  There  are  certain  titles  and  forms  which, 
though  not  always  recognized  legally,  have  grown  to  be 
necessary  through  common  usage.  Here  are  some  examples : 

1.  A  minister  of  the  Gospel  should  be  addressed  as  "  Rev- 
erend." 

2.  The  President  of  the  United  States,  the  Governor  of 
any  state,  and  the  Ambassadors  of  the  United  States  should 
be  addressed  as  "  His  Excellency." 


LETTER  WRITING  23 


3.  The  Vice-President,  Senators,  and  Representatives  of 
the  United  States,  the  Lieutenant-Governor  of  a  state,  state 
Senators,  Judges,  Mayors,  and  heads  of  Departments  of  the 
General  Government  should  be  addressed  as  "  Honorable." 

4.  In  official  correspondence  it  is  better  to  address  the 
office  than  the  officer,  as,  "  To  the  Secretary  of  State,  The 
Honorable  John  Hay.    Sir :  — ",  instead  of  "  To  the  Honorable 
John  Hay,  Secretary  of  "State." 

5.  The  following  miscellaneous  titles  are  generally  used: 
His  Excellency  and  Mrs.  Theodore  Roosevelt ;  Governor  and 
Mrs.  Hazen  S.  Pingree;  the  Honorable  and  Mrs.  William  P. 
Frye;  the  Rev.  Dr.  and  Mrs.  James  P.  Henson;  Prof,  and  Mrs. 
Chas.  B.  White;  Mr.  and  Mrs.  W.  J.  Burdick. 

6.  In  writing  letters  to  ordinary  officials,  it  is  customary 
to  begin   with   the   salutation  "Sir:—"  and   close   with  "I 
remain  your  obedient  servant,"  or  "  I  have  the  honor,  Sir,  to 
be  your  obedient  servant."     A  common  form  of  addressing 
the  President  of  the  United  States  is,  "To  the  President, 
Executive  Mansion,  Washington,  D.  C.,"  and  the  salutation 
merely,  "  Mr.  President." 

7.  In  writing  a  letter  to  a  gentleman,  the  salutation  should 
be  "  Dear  Sir,"  "  Dear  Mr.  -       — ,"  or  if  he  be  an  old  acquaint- 
ance, "  My  dear  Sir,"  "  Dear  Friend,"  or  "  My  dear  Friend." 

8.  In  writing  a  letter  to  a  married  woman,  the  salutation 
should  be  "  Madam"  or  "  Dear  Madam  "  or  "  Dear  Mrs.  -      — . " 
If  the  lady  is  unmarried  the  salutation  is  "  Dear  Madam  "  or 
"  Dear  Miss  —     — ." 

CAUTION. —  Letters  containing  blots,  erasures,  or  interlineations 
should  never  be  posted,  but  should  be  rewritten.  Careless  writers 
show  a  lack  of  respect  for  the  person  written  to,  and  the  recipient  of 
such  a  letter  is  likely  to  consider  it  of  little  importance. 


24        A  FIRST  BOOK  IN  BUSINESS  METHODS 


EXERCISES 

/.  Write  a  letter  to  a  friend  who  lives  in  an  adjoining 
state,  giving  him  a  cordial  invitation  to  visit  you. 

2.  You  are  about  to  visit  a  friend  who  lives  in  a  distant  city. 
Write  him  a  letter  telling  him  when  you  will  arrive,  and  ask 
him  to  meet  you  at  the  train. 

j.  Write  a  letter  to  farmer  Rice  asking  him  if  he  can 
supply  you  with  a  few  bushels  of  choice  apples  for  your 
winter  use.  Ask  him,  also,  what  varieties  he  has,  and  the 
price  per  bushel. 

4.  You  are  a  young  man  just  beginning  business  for 
yourself  with  a  small  amount  of  capital.     Write  to  a  whole- 
sale merchant  asking  him  if  he  will  sell  you  $500  worth  of 
goods  and  give  you  four  months'  time  in  which  to  pay  for 
them. 

5.  You  receive  a  quantity  of  goods  and  a  bill  for  the  same, 
but  you  find  that,  in  footing  the  bill,  an  error  of  $10.00  was 
made  in  favor  of  the  wholesale  merchant.    Write  him  a  polite 
letter  calling  his  attention  to  the  error. 

6.  You  order  a  bill  of  goods  from  Johnson  &  Co.,  No.  231 
Canal  Street,  Chicago,  but  the  goods  have  not  been  shipped 
in  time  for  your  need.     Write  a  letter  countermanding  the 
order. 

7.  H.  C.  Whitney  of  Downey,  Cal.,  is  owing  you  money 
which  is  long  past  due.     Write  him  in  reference  to  the  matter. 
Mr.  Whitney  has  given  your  letter  no  attention.     Write  him 
a  second  letter  more  pointed  than  the  first.    You  now  find 
that  he   does  not  intend  to   pay  you  the   amount  that   he 

.owes  unless  he  is  forced  to  do  so.  Write  a  letter  to  Howard 
&  Johnson,  attorneys  at  law,  in  Downey,  Cal.,  and  instruct 
them  to  commence  legal  proceedings  for  collection  of  the 
account. 


LETTER  WRITING  25 


8.    Answer  the  following  advertisements : 


WANTED-BRIGHT   BOY  FOB   OFFICE   WORK. 
Must  be  good  penman  and  quick  at  figures.    Ad- 
dress in  own  handwriting,  A.  K.,  care  Telegraph. 

BOY-BRIGHT,  SMART,  ACTIVE   OFFICE  BOY; 
17  or  18  years  old ;  must  be  good  penman  and  ac- 
curate in  figures;  salary  825  per  month.    Address, 
with  references,  P  O  518,  Tribune  office. 

YOUNG  LADY-TO  FILL  VACANCY  IN  IMPOR- 
tant  clerical  department ;  one  writing  a  rapid  com- 
mercial hand  preferred ;  age  from  18  to  23  years ;  salary 
$6  to  $7  to  start ;  when  qualified  the  position  pays  up 
to  $60  a  month;  references  required.  Address  N  E  51, 
Tribune  office. 

WANTED-BOY,  15  YEARS  OR  OLDEE  ;  ONE  LFV- 
Ing  with  parents  preferred.    712  W.  Lake  st. 

BOYS-IN  OFFICE  OF  LARGE  WHOLESALE 
house ;  15-16  years  of  age ;  must  live  at  home  and 
have  good  references ;  good  opportunity  for  advance- 
ment; wages  $4  to  start.  Address  H  496,  Record- 
Herald. 

ADDRESSER-WELL  EDUCATED  YOUNG  LADY: 
must  be  neat,  accurate,  and  write  good,  plain,  rapid 
hand ;  North  Side ;  fine  chance  to  advance.    Address 
P  258,  Tribune  office. 


9.  You  buy  a  quantity  of  goods  and  are  allowed  four 
months'  time  in  which  to  pay  for  them.  At  the  expiration 
of  the  four  months  you  are  unable  to  pay  for  the  whole 
amount  of  the  goods.  Write  a  letter  to  the  wholesale  mer- 
chant offering  to  pay  one-half  of  the  amount  at  once,  and  to 
give  your  note  due  in  thirty  days  for  the  balance. 

/o.  Write  to  the  Representative  of  your  district  in  Con- 
gress asking  him  to  send  you  a  copy  of  his  latest  speech 
delivered  in  the  House  of  Representatives. 

11.  Write  a  letter  to  The  Ransom  Mercantile  Co.,  No.  78 
Centre  Street,  Denver,  Colo.,  ordering  10  cases  of  starch  and 
1 5  cases  of  Royal  Blue  blackberries  to  be  shipped  by  freight. 
In  ordering  goods  the  number  of  articles  desired  is  written 
in  figures,  not  in  words. 

12.  Write  a  letter  to  The  Samuel  J.  Johnson  Co.,  Birming- 
ham, Ala.,  advising  of  the  shipment  by  express  of  the  dry 


26        A  FIRST  BOOK  IN  BUSINESS  METHODS 


goods  ordered  of  your  salesman,  Mr.  Strang.  Thank  them 
for  the  order,  and  express  the  hope  that  you  may  receive 
further  orders  from  them  in  the  near  future. 

ij  Write  out  the  following  exercises,  punctuating  and 
arranging  each  specimen  correctly: 

Chicago  111  Jan  17  1901  J  F  Lamborn  Plainfield  N  J  Dear  Sir 
We  have  your  recent  letter  and  beg  leave  to  inform  you  that  we 
have  turned  the  matter  over  to  our  attorneys  Messrs  Lamb  & 
Jackson  of  your  city  Yours  truly  James  &  Hackett 

J  S  Slocum  &  Co  Cotton  Brokers  New  Orleans  La  No  76  Water 
St  Sept  7  1901  Mr  B  B  Sweet  Steamboat  Rock  Iowa  Dear  Sir  We 
have  received  your  inquiry  with  regard  to  cotton  and  would 
advise  you  to  buy  now  as  we  are  confident  that  the  price  will 
advance  materially  in  the  near  future  kindly  advise  us  by  return 
mail  as  to  your  decision  and  we  will  endeavor  to  do  the  best  we 
can  for  you  Very  truly  yours  J  S  Slocum  &  Co 

14.  Your  friend,  C.  B.  Stimpson,  is  about  to  go  to  Cin- 
cinnati, O.,  to  seek  employment  as  a  stenographer.  Write  a 
letter  of  recommendation  for  him.  To  whom  is  such  a  letter 
usually  addressed? 

75.  Miss  Alice  Jones  has  been  a  successful  teacher  in 
your  school  during  the  past  year,  and  asks  for  a  letter  of 
recommendation.  Write  the  letter. 

16.  Mary  Milligan  has  been  employed  as  servant  in  your 
father's  family  for  the  past  two  years  and  has  given  entire 
satisfaction.  Write  a  letter  of  recommendation  for  her. 

77.  You  are  a  commission  merchant  in  Detroit,  and  one  of 
your  customers  is  putting  up  fruit  which  he  ships  to  you  in 
a  very  unsatisfactory  manner.  Write  him  in  regard  to  the 
matter. 


LETTER  WRITING  27 

18.  You  are  shipping  produce  to  Smith  Bros.,  commission 
merchants,  New  York.  They  are  slow  in  sending  returns 
of  sales,  and  have  made  excessive  charges  for  drayage,  etc. 
Write  a  polite  but  pointed  letter  to  them  asking  for  an  expla- 
nation. 

ig.  You  buy  a  quantity  of  goods  of  a  wholesale  house. 
Write  the  firm,  calling  their  attention  to  the  fact  that  the 
goods  are  not  as  represented,  and  refuse  to  accept  them. 

Study  the  following  models  for  friendly  or  business  letters : 

Form  XV. 

SOUTH  BEND,  IND.,  Nov.  14,  1901. 
MR.  GEORGE  R.  EDWARDS, 
Centerville,  111. 

FRIEND  GEORGE: — I  learned  only  a  few  days  ago  that  you  are 
living  in  Centerville,  and  take  the  first  opportunity,  since  learning 
your  address,  to  write  to  you.  I  hope  to  receive  from  you  in  reply 
a  long  letter  telling  me  something  of  yourself  and  family.  It 
would  be  a  great  pleasure  to  me  to  see  you  all  again.  How  have 
you  been  all  these  long  years?  I  hope  you  are  prosperous  and 
happy. 

I  have  just  returned  from  a  visit  to  our  old  home  in  Maine. 
Many  changes  have  occurred  since  we  were  there  together.  There 
are,  of  course,  the  same  hills  and  the  same  valleys  ;  and  the  same 
little  brook  goes  rippling  along  just  as  it  used  to  do  when  we  were 
boys  and  played  on  its  banks.  But  nearly  all  of  our  old  friends  and 
schoolmates  are  gone ;  some  have  died  and  some  have  emigrated 
to  the  far  West  in  search  of  new  homes.  Perhaps  you  may  know 
where  some  of  them  are  ;  if  so,  I  should  be  glad  to  have  you  send 
me  their  addresses  so  that  I  may  write  to  them. 

Awaiting  the  pleasure  of  your  reply,  I  am  as  ever, 

Your  friend, 

PERRY  E.  WILLIAMS. 


28       A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  XVI. 

EXCELSIOR  SPRINGS,  Mo.,  April  10,  1901. 
MESSRS.  BECKHAM,  MCKNIGHT  &  Co., 

Wholesale  Grocers,  Kansas  City,  Mo. 
GENTLEMEN: 

I  have  made  arrangements  to  engage  in  the  grocery 
business,  and  shall  open  a  new  store  at  this  place  about  May  ist. 

I  have  not  yet  purchased  my  stock  of  goods,  and  at  the  urgent 
request  of  some  of  my  friends,  I  have  decided  to  write  you  to  ask 
what  inducements  you  can  offer  me.  If  your  prices  and  terms 
are  satisfactory,  I  shall  be  pleased  to  give  you  my  order  for  goods. 

I  have  about  $2,000  cash,  and  am  prepared  to  give  good  security 
for  any  goods  which  I  may  wish  to  purchase  in  excess  of  this 

amount. 

Yours  truly, 

CHARLES  A.  MITCHELL. 

Form  XVII. 

GRAND  TRAVERSE,  MICH.,  Nov.  20,  1901. 
MESSRS.  A.  S.  FROST  &  Co., 

Chicago,  111. 
GENTLEMEN  : 

I  have  shipped  you  by  freight  to-day,  as  per  invoice 
and  bill  of  lading  enclosed,  twenty  barrels  of  choice  winter  apples 
which  I  wish  you  to  sell  for  me  on  commission  at  the  highest  price 
your  market  will  afford. 

These  apples  have  been  carefully  packed,  and  as  they  are  of 
the  best  quality  of  winter  fruit,  I  feel  confident  they  will  please 
your  customers.  If  this  lot  meets  with  ready  sale  at  satisfactory 
prices,  I  shall  make  another  shipment  soon. 

Please  keep  me  informed  regarding  the  apple  market  in  your 

city,  and  oblige, 

Yours  truly, 

PETER  VAN  ZEE. 


LETTER  WRITING  29 

Form  XVIII. 

TACOMA,  WASH.,  Nov.  18,  1901. 

MR.  E.  J.  WOODBRIDGE, 

City. 
DEAR  SIR  : 

Enclosed  herewith  I  mail  you  a  statement  of  your  account 
with  me,  showing  a  balance  in  my  favor  of  $65.45. 

I  do  not  wish  to  unduly  urge  you  for  payment  of  this  account, 
but  I  am  obliged  to  use  all  the  funds  which  I  can  command,  to 
meet  an  obligation  coming  due  on  the  2ist  inst,  and  if  you  can 
accommodate  me  by  payment  of  the  account  before  that  date,  I 
shall  esteem  it  a  great  favor. 

Kindly  let  me  hear  from  you  at  your  earliest  convenience,  and 
oblige, 

Yours  truly, 

W.  M.  BACON. 

16.  Telegrams.  Many  important  business  messages  sent 
by  one  person  or  firm  to  another  go  by  telegraph  and  not  by 
mail,  and  most  individuals  find  it  necessary,  occasionally,  to 
send  personal  messages  by  telegraph. 

As  the  cost  of  sending  a  telegram  depends  upon  the  num- 
ber of  words  in  the  message,  they  are  usually  made  as  brief  as 
possible.  In  sending  a  telegram  to  any  part  of  the  United 
States  or  Canada  the  number  of  words  in  the  body  of  the  mes- 
sage only  are  counted,  no  charge  being  made  for  the  address 
or  signature.  As  many  words  as  are  necessary  may  be  used 
in  giving  the  address  of  the  person  to  whom  the  message  is 
sent.  The  body  of  the  message  may  contain  ten  words,  and 
no  deduction  is  made  if  the  number  is  less;  but  if  the  body 
of  the  message  contains  more  than  ten  words,  each  additional 
word  is  charged  for.  The  rate  of  charges  depends  upon  the 
distance. 


30       A  FIRST  BOOK  IN  BUSINESS  METHODS 


17.  Night  Rates  and  Cable  Messages.    As  the  telegraph 
lines  are  not  so  busy  at  night,  messages  may  then  be  sent  at 
half  rates.     Business  men  frequently  take  advantage  of  these 
low  rates  in  sending  messages  long  distances.    These  mes- 
sages are  delivered  in  the  morning  as  soon  as  business  offices 
are  opened,  and  often  answer  the  purpose  quite  as  well  as  the 
full  rate  messages.     For  the  convenience  of  those  who  wish 
to  take  advantage  of  the  night  rates,  a  special  blank  is  pro- 
vided, usually  printed  in  red.     Night  letters,  also  day  letters, 
of  fifty  words  or  more  may  now  be  sent  at  very  low  rates. 

All  messages  which  go  by  cable  to  foreign  countries  are 
charged  for  according  to  the  number  of  words,  including  the 
address  and  signature. 

1 8.  Forms  of  Telegrams.     Blanks  are  provided  by  the 
telegraph  companies  for  the  convenience  of  persons  sending 
messages.     In  writing  the  message  it  is  usually  not  necessary 
to  use  any  title,  as  "  Mr."  or  "  Messrs.,"  before  the  name  of  the 
person  or  persons  addressed,  and  no  salutation  is  used,  such  as 
"  Dear  Sir  "  or  "  Dear  Madam  "  or  "  Gentlemen  " ;  neither  is  it 
necessary  to  use  any  complimentary  close,  such  as  "Yours 
truly"  or  "  Respectfully  yours." 

Telegrams  should  not  be  made  so  brief  for  the  sake  of 
saving  a  small  expense  that  they  cannot  be  understood,  and 
important  telegrams  should  be  repeated  to  make  sure  that 
they  have  been  sent  correctly. 

Example :  Let  us  suppose  that  Mr.  D.  W.  Simpson,  who  lives 
in  Jackson,  Mich.,  wishes  to  telegraph  to  Messrs.  Brown  &  Ham- 
mond at  Chicago,  to  send  him  at  once,  by  express,  ten  bushels  of 
timothy  seed.  He  would  write  a  message  something  like  that 
shown  in  Form  XIX. 


LETTER  WRITING  31 

Form  XIX. 

THE  WESTERN  UNION  TELEGRAPH  COMPANY 

'INCORPORATED.) 

THOS.   T     ECKERT,  President  and  General   Manager 
MESSAGES  TAKEN   BY   THIS  COMPANY  ARE  SUBJECT  TO  THE  CONDITIONS   PRINTED  ON   OUR  FORM   NUMBER  TWO. 


D  the  following  me..age  .ubject  to  the  )         I  /  £ 

term.  printed  on  your  form  number  two,  }          Y  (J  ^f^tl_ 
which  are  h.reb,a*«e<.  to.  )   ~7} 


A  Telegram 
Form  XX. 


NIGHT    LETTER 

THE  WESTERN   UNION  JTELEGRAPH  COMPANY 

25.000  OFFICES  IN  AMERICA  CABLE  SERVICE  TO  ALL  THE  WORLD 


I  '"  I 


SEND  .».,„„..,„.  NIGHT  LETTER 

st>  T,oul8.   Sept.   1,1911 


Rand  UoEally  &  Co.. 

Chicago.   Ille. 

Ship.  Chicago  Alton,   fifty  Dodge  Elementary  Geographies. 
BSTonty  Dodge  Aflvanoed.   one  hunrtrefl  ilaoe  School  Histories.  twenty  itoce 
Primary,  fifty  Bueinese  Method  a.   twenty-five  Helton  Primers.  twenty 
Book  One,  twenty-five  Book  Two.   twenty  -five  Book  Three  Llghta  ttf 
Literature  Readers.     RuBh.     »chools  open  Monday.     Back  order  items  out 
of  stock. 

P.  H.  Perry. 


LPOSTAl  COMPANY'S  SYSTEM  REACHES  All  IMPORTANT  POINTS  IN  THE  UNITED  STATES  AND  BRITISH  AMERICA,  AND  "-  COMMERCIAL  CABLES,  TO/LL  THE  WORLD, 

A  Night  Lettergram 


32        A  FIRST  BOOK  IN  BUSINESS  METHODS 


19.  Telegraphic  Codes.  A  telegraphic  code  is  a  list  of 
words,  each  one  of  which  may  mean  a  whole  sentence  or  a 
part  of  a  sentence.  Many  business  firms  now  use  such  codes 
when  sending  messages  by  telegraph.  It  is,  of  course,  neces- 
sary that  the  sender  and  receiver  of  the  message  should  each 
have  a  copy  of  the  code.  The  person  who  receives  the  tele- 
gram takes  each  word  separately,  and  by  referring  to  the 
code  he  can  readily  understand  the  meaning  of  the  message. 
There  are  several  telegraphic  codes  in  general  use,  one  of 
which  is  called  the  ABC  telegraphic  code ;  another  is  called 
the  Western  Union  telegraphic  code. 

Example:  Suppose  S.  E.  Grove  &  Co.  of  Philadelphia,  Pa.,  wish 
to  telegraph  to  Eldridge  Bros.,  Chicago,  this  message,  "  Goods  are 
not  same  as  samples.  What  discount  allowed  for  cash?  Cancel 
all  contracts  until  further  advice.'*  If  they  should  use  the  ABC 
code  in  transmitting  the  message,  they  would  write  the  message 
as  shown  by  the  form  below  : 

Form  XXI. 

PHILADELPHIA,  PA.,  Oct.  28,  1901. 
ELDRIDGE  BROS., 

Chicago,  111. 
Glossary,  Dismember,  Calabrian. 

S.  E.  JOHNSON  &  Co. 

The  meaning  of  these  words,  when  translated  by  the  ABC 
telegraphic  code,  is  as  follows  •. 

"  Glossary,"  Goods  are  not  same  as  samples. 

"  Dismember,"  What  discount  allowed  for  cash  ? 

"  Calabrian,"  Cancel  all  contracts  until  further  advice. 

It  will  readily  be  seen  that  by  this  method  much  informa- 
tion may  be  transmitted  by  telegraph  at  a  small  cost.  These 
codes  are  generally  used  in  telegraphing  to  foreign  countries 


LETTER  WRITING  33 


EXERCISES 

/.  Write  a  telegram  not  exceeding  ten  words,  ordering 
3  barrels  of  granulated  sugar  of  W.  M.  Hoyt  &  Co.,  Chicago, 
to  be  shipped  at  once  by  freight. 

2.  Write  a  telegram  not  exceeding  ten  words  to  J.  R. 
Thompson,  Battle  Creek,  Mich.,  asking  him  to  meet  you  at 
Battle  Creek  at  the  arrival  of  the  three  o'clock  train  east. 

j.  Write  a  telegram,  as  brief  as  possible,  to  Reid,  Murdoch 
&  Co.,  Chicago,  informing  them  that  the  goods  ordered  ten 
days  ago  have  not  yet  arrived.  Ask  them  why. 

^.  Telegraph  George  W.  Smith,  Milwaukee,  c/o  Pfister 
House,  that  his  store  burned  this  morning,  and  ask  him  to 
come  home  at  once. 

5.  You  have  ordered  of  Hibbard,  Spencer,  Bartlett  &  Co., 
Chicago,  10  kegs  of  nails.     Telegraph  them  to  send  15  kegs 
instead  of  10.     Make  the  telegram  as  brief  as  possible. 

6.  The  Thomas  J.  Eckert  Co.  of  San  Jose,  Cal.,  order  by 
telegraph  from  Sampson,  Lahiff  &  Co.,  Sioux  Falls,  S.  D.,  100 
bu.  timothy  seed  and  500  bu.  clover  seed,  to  be  sent  by  freight. 
Write  the  telegram  and  do  not  let  it  exceed  ten  words. 

7.  Telegraph  Bruce  Davis,  No.  741  Center  Street,  Muncie, 
Ind.,  that  you  cannot  fill  his  order  for  beans  at  the  price 
offered,  84C.,  and  advise  him  that  you  will  explain  by  letter. 
Write  the  letter,  confirming  your  telegram,  and  give  him  full 
explanation. 

CAUTION. — Remember  that  in  telegraphing,  all  figures  are 
counted.  If  the  number  ten  were  expressed  in  figures,  10  ^vould  be 
counted  as  two  ^vords  ;  105  would  be  counted  as  three  words. 
Therefore  it  is  better  to  write  out  in  full  all  words  expressing 
numbers. 


CHAPTER  II. 

BILLS,  INVOICES,   STATEMENTS  OF  ACCOUNT, 
RECEIPTS 

20.  Bills.  A  bill  is  an  itemized  account  of  goods  bought 
or  work  performed.  It  should  contain  the  names  of  the  parties 
buying  and  selling,  the  date  and  place  of  sale,  the  kind,  quan- 
tity, and  price  of  the  goods  sold,  and  the  terms  of  sale. 

If  a  merchant  sells  a  quantity  of  goods,  a  bill  is  usually  made 
out,  giving  a  list  of  the  articles  sold  and  the  price,  and  if  pay- 
ment is  made  for  the  goods,  the  seller  writes  at  the  bottom  of 
the  bill,  "  Paid,"  or  "  Received  payment,"  and  signs  his  name. 
If  payment  is  received  by  a  clerk,  he  "receipts  the  bill"  by 
signing  the  proprietor's  name,  followed  by  his  own  name,  as 
in  the  following  form : 

Form  XXII. 
BILL  OF  GOODS 

CINCINNATI,  O.,  Sept.  i,  1901. 
MR.  J.  P.  WILSON 

Bought  of  R.  W.  Hill  &  Co. 
Ibs.  Coffee  @  20  cts. 
Ibs.  Canned  Peaches  @  10  cts. 

$45-3° 
Received  payment. 

R.  W.  HILL  &  Co., 

per  G.  ALLEN. 


BILLS,  INVOICES.  STATEMENTS,  RECEIPTS    35 


21.  Bills  for  Labor  or  Account.  In  making-  out  a  bill  for 
work  performed  or  for  an  account  which  has  been  running  for 
some  time,  the  heading  of  the  bill  is  somewhat  different  from 
that  for  goods  sold. 

Example  :  Suppose  John  D.  King  has  been  at  work  for  C.  W. 
Fennel  3^  days  at  $1.50  per  day  and  has  furnished  20  Ibs.  of  nails 
at  3%  cts.  per  Ib.  and  385  ft.  of  lumber  at  $14.50  per  1,000  ft.  He 
would  make  out  a  bill  something  like  the  following  : 

Form  XXIII. 

CAMDEN,  N.  J.,  Aug.  9,  1901. 
C.  W.  FENNEL 

To  JOHN  D.  KING,  Dr. 

To  3Y<2  days'  labor   @    fi.jo  fS-2S 

"  20  Ibs.  Nails        @  j%  cts.  .70 

"  385  ft-  Lumber   @  $14.50  5.58 


Should  John  D.  King  wish  to  sell  the  account  to  O.  D.  Snyder, 
it  would  be  necessary  to  assign  the  account  by  writing  the  assign- 
ment across  the  back.  The  assignment  would  be  as  shown  in  the 
following  form  : 

Form  XXIV. 

In  consideration  of  -  dollars,  the  receipt  of  which  is  hereby 
acknowledged,  1  hereby  sell  and  assign  to  O.  D.  Snyder,  the  within 
account  ',  which  is  justly  due  from  the  within  named  C.  W.  Fennel, 
and  I  hereby  authorize  the  said  O.  D.  Snyder  to  collect  the  same. 

CAMDEN,  N.  J.,  Aug.  9,  1901.  JOHN  D.  KING. 

22.  Invoices.  When  a  customer  buys  a  quantity  of  goods 
from  a  wholesale  house,  the  firm  of  whom  the  goods  are  pur- 
chased makes  out  a  list  of  the  various  goods  bought  and  the 
price  of  each  kind,  and  gives  it  to  the  buyer.  This  itemized 


36        A  FIRST  BOOK  IN  BUSINESS  METHODS 


statement  is  called  by  the  buyer  an  invoice,  and  by  the  seller 
a  bill.  It  has,  however,  become  quite  customary  for  both 
buyer  and  seller  to  call  it  an  invoice.  An  invoice,  then,  is  an 
itemized  statement  of  goods  bought  of  a  manufacturer  or 
dealer,  with  the  place  and  date  of  sale,  the  names  of  the 
parties  buying  and  selling,  the  quantities  and  prices  of  the 
goods,  and  the  terms  of  sale. 

The  first  double  column  to  the  right  of  the  invoice  is  the 
column  in  which  are  placed  the  various  amounts  showing  the 
cost  of  the  different  articles  sold,  and  the  carrying  out  of  the 
cost  into  this  double  column  is  called  extension,  or  extending 
the  amounts.  In  finding  the  various  amounts  of  an  invoice 
or  bill  it  frequently  occurs  that  the  result  involves  the  frac- 
tional part  of  a  cent.  In  such  cases  it  is  customary  to  drop 
the  fractional  part  of  a  cent  if  it  is  less  than  one-half,  and  if 
it  is  more  than  one-half,  to  call  it  one  cent.  If  the  results 
obtained  contain  more  than  one  half  cent,  the  first  is  called  a 
whole  cent  and  the  next  half  cent  is  dropped. 

The  forms  given  on  page  37  are  common  forms  of  invoices 
or  bills.  If  there  are  any  discounts,  (§§  24  and  25)  they  are 
entered  in  the  first  double  column  and  the  difference  or 
amount  of  the  bill  is  carried  out  into  the  last  column. 

23.  Corrected  and  Duplicate  Invoices.  Sometimes  it  is 
found  after  an  invoice  has  been  sent  to  the  purchaser  of  the 
goods  that  there  is  an  error  in  the  amount  shown  by  the 
invoice,  or  the  terms  of  discount  are  incorrect.  It  is  then 
necessary  to  make  out  a  new  invoice,  mark  it  "Corrected 
Invoice/'  and  send  it  to  him. 

If  an  invoice  which  has  been  sent  to  a  purchaser  of  goods 
does  not  reach  him,  a  new  invoice  exactly  like  the  first  should 
be  made  out  and  at  the  bottom  should  be  noted  that  this  is 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     37 


Form  XXV. 


JOBBCRS  OF  GLASS. 


,  3ASH  &  BLINDS, 

HARDWOOD  INTERIOR  FIMISH. 


^4/i  Invoice 
Form  XXVI. 


TERMS 


BOUGHT  OF 

Ht4SBfll» 


S  CENTS  PER  GALLON    NOS226,228,230,"NTNETEENTOST. 

-    -    -OWAHCf S  MUST  Bt  UADf  WTHIH  five  O»YS  AFTfK  KKCIfl  Of  t 
HOTPtIO  WHtMOUl 


Invoice  with  Terms  of  Discount  noted 


38       A  FIRST  BOOK  IN  BUSINESS  METHODS 


EDWAROSTrws 


Kendallville,  Ind. 


2 

d.oz 

Wheelbarrows     0               *14.50 

29 

00 

1 

8  ft..  Stand  Step  Ladder 

14 

no 

>.00 

ITiS 

Sheet  Zinc   fi                      .08 

16 

00 

sq_ 

00 

Less  5jJ  trade  discount 

2 

95 

&56 

)5 

An  Invoice  with  Terms  of  Discount  noted 

a  "  Duplicate  Invoice."     This  invoice  should  be  sent  him 
to  take  the  place  of  the  one  which  was  lost. 

When  a  bill  or  invoice  is  receipted  by  the  seller,  if  there 
is  not  sufficient  room  to  sign  his  name  at  the  foot  of  the 
invoice,  he  may  write  it  on  the  margin  of  the  sheet  or  across 
its  face. 

24.  Trade  Discount.  In  business  transactions,  reductions 
or  allowances  are  sometimes  made  from  the  amount  of  an 
account,  a  debt,  or  the  face  of  a  note,  and  these  reductions  are 
called  discounts.  Manufacturers  and  wholesale  dealers  some- 
times allow  to  their  best  customers,  and  to  those  who  buy  in 
large  quantities,  a  discount  from  the  amount  of  the  bill,  and 
this  is  called  trade  discount. 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     39 


Sometimes  two  or  more  discounts  are  given  in  succession. 

Example:  A  merchant  buys  a  bill  of  goods  amounting  to 
$150  and  is  allowed  a  discount  of  10$  and  5$  off  from  the  list 
price.  This  does  not  mean  a  reduction  of  15$  of  the  amount  of 

Form  XXVIII. 

We  render  statements  for  bills,  DUE  AND  NOT  DUE,  as  per  our  Ledger,  on  the  first  ol 
each  month.  This  gives  opportunity  for  the  correction  of  errors  and  in  nut  a  demand 
for  bilU  NOT  DUE. 


MONTHLY    STATEMENT 


IN  ACCOUNT  WITH  EAGLE  PENCIL  CO . 

Office  and  Salesroom,  377  and  379  Broadway, 


Statement  of  Account  showing  several  Debits  and  no  Credit 


40       A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  XXIX. 

PEORIA.  lLL.. 


TO  THE  F.  H.  PFEIFFER  CROCKERY  Co.,  DR. 

326  SOUTH   ADAMS  STREET 

CROCKERY.  LAMPS  AND  GLASSWARE. 


^c— 


&    >•       6-0 


Statement  showing  one  Debit  and  one  Credit 

the  bill,  but  it  means  a  reduction  of  10$  from  $150  and  5$  of 
the  remainder  after  deducting  the  amount  of  the  first  discount. 
In  the  foregoing  example,  io#  of  $150  would  be  $15.00.  Sub- 
tracting this  from  the  amount  of  the  bill  gives  us  the  new 
amount  of  $135,  the  amount  the  merchant  is  to  pay  if  but  one 
discount  is  allowed.  But  there  is  a  second  discount  of  5$,  and  5$ 
of  $135  is  $6.75.  Now  if  we  subtract  $6.75  from  $135  we  have 
$128.25,  the  amount  the  merchant  is  to  pay,  unless  he  is  entitled 
to  a  cash  discount  also. 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     41 


Form  XXX. 


TO  THE  F.  H.  PFEIFFER  CROCKERY  Co,,  DR. 

326  SOUTH  ADAMS  STREET. 

CROCKERY,  LAMPS  AND  GLASSWARE. 


we  ftand  jw<  S(a««m«.t  /or 
Kat  htarwj  from  you  tu 


prompt  rtmittaM* 


.  and  (ni»t  you  unU  tonor  tame.     We  prefer  UuA  you  mutt 

Statement  showing  one  Debit  "with  several  Credits 

We  would  proceed  in  the  same  manner  as  in  the  preceding 
example  if  there  were  more  than  two  discounts.  Merchants 
establish  a  selling  price  for  their  goods  which  they  call  the 
list  price.  As  circumstances  arise  and  the  prices  of  their 
goods  have  to  be  changed  they  change  the  price  to  their 
customers  by  changing  the  discounts.  Thus,  to  one  not 
acquainted  with  the  methods  of  marking,  the  prices  of  one 


42       A  FIRST  BOOK  IN  BUSINESS  METHODS 


•TOTCMtNT. 


Form  XXXI. 

PEORIA.  ILL. 


TO  THE  F.  H.  PFEIFFER  CROCKERY  Co,,  DR. 

326   SOUTH    ADAMS   STREET. 

CROCKERY.  LAMPS  AND  GLASSWARE. 


t  be  prepaid.  and  all  cbecki  on  conalrj  bank!  matt  Include  3 
,  or  read  "  With  Exchange  "     Our  bill*  arc  payable  In  Peoria 


35  etott,  COM  o» 


^ 


«.  /L»V    (^/ 


a? 


a*  -.a. 


3.7*- 


?6 


About  m  hand  you  Statement  for  Atamnt  peat  dw.  and  rejwf^  n  prompt  t 

e.     V<tf  h,**»y  from  you  6y         W—  4^+**-'  /  °      mil  make  Draft  at 

if/CKS  J  '  siVU.  an<7r^-Jw  ivtU  ftonor  ionx.      Ife  prytr  (Aa«  jwu  remit 


Statement  showing  several  Debits  and  one  Credit 

man's  goods  might  appear  to  be  vastly  more  than  those  of 
another,  while  if  he  should  take  into  account  the  discounts, 
he  would  find  that  they  were  very  nearly  the  same. 

25.  Cash  Discount.  Most  business  houses  give  their  cus- 
tomers 30,  60,  or  90  days  in  which  to  pay  their  bills,  and 
allow  them  a  certain  percentage  of  the  total  or  gross  amount 
if  the  bills  are  paid  before  they  are  due.  For  instance,  if  the 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     43 


ISO-*' 


TO  THE  F.  H.  PFEIFFER  CROCKERY  Co.,  DR. 

326  SOUTH   ADAMS   STREET 

CROCKERY.  LAMPS  AND  GLASSWARE. 


Above  m  hand  you  Statement  for  Accounant  due,  and  request  a  prompt  remittance 


and  tnut  you  wiU  honor  tame.     We  prefer  that  you  remit 

Statement  showing  several  Debits  and  several  Credits 

whole  amount  be  due  in  30  days  a  wholesaler  may  allow  2,% 
off  from  this  total  amount  if  paid  in  10  days. 

In  Form  XXXIII.  you  will  notice  that  the  terms  given  are 
30  days  net  or  \%  off  in  10  days,  which  means  that  if  the  cus- 
tomers wait  30  days  before  paying,  they  must  pay  Scarbrough 
&  Hicks  $62.50,  but  if  they  pay  within  10  days'  time,  they  will 
be  allowed  to  subtract  \%  of  the  amount,  or  63  cents,  and 


44       A  FIRST  BOOK  IN  BUSINESS  METHODS 


A  Bill  showing  Terms  of  Discount 

remit  the  balance,  or  $61.87.  These  terms  of  discount  are 
often  written  as  follows:  2/10,  1/30,  or  60  net,  which  means, 
of  course,  that  the  buyer  will  be  allowed  a  discount  of  2%  if 
he  pays  within  10  days,  and  a  discount  of  \%'\i  he  pays  within 
30  days,  but  if  he  waits  until  the  expiration  of  the  60  days  he 
would  not  be  entitled  to  any  discount,  but  must  pay  the  whole 
amount  of  the  bill. 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     45 


Form  XXXIV. 


TO  THE  F,  H.  PFEIFFER  CROCKERY  Co.,  DR. 

326  SOUTH   ADAMS  STREET 

CROCKERY.  LAMPS  AND  GLASSWARE. 


part  due,  and  Truest  a  prompt  rtmittante 
U^i^'     *%      mH  mate  Draft  at 
and  trust  y^J/foi  Aonor  same.     We  prefer  that  you  remit. 

Statement  of  Account  Paid 

26.  Statements  of  Account.  A  statement  of  account  is  quite 
a  different  thing  from  an  invoice  or  bill.  It  shows  all  the 
debits  and  credits  of  an  account  as  they  appear  on  the  books 
of  the  seller.  If  an  invoice  was  made  out  and  delivered  to 
the  purchaser  when  the  goods  were  bought,  it  is  not  necessary 
to  make  an  itemized  statement,  but  simply  to  give  the  amount 
of  each  purchase  and  the  date  "As -per  bill  rendered." 


46       A  FIRST  BOOK  IN  BUSINESS  METHODS 


Sometimes  when  goods  are  sold  on  account  by  retail  estab- 
lishments, no  bill  is  made  out  until  the  end  of  the  month.  In 
such  cases  an  itemized  statement  should  be  rendered,  giving 
a  list  of  all  the  articles  sold.  In  the  retail  business  these 
statements  are  usually  made  out  at  the  end  of  each  month, 
and  in  the  wholesale  trade,  statements  are  made  at  the  expi- 
ration of  the  term  of  credit.  Usually  these  terms  of  credit 
are  30,  60,  or  90  days,  and  sometimes  four  or  five  months. 

When  a  statement  is  paid,  it  should  be  receipted  the  same 
as  an  invoice  or  bill,  and  returned  to  the  person  who  paid  it. 

Form  XXXV. 


CREDIT   MEMORANDUM 


Pittsburgh, 


Account  w.tb  Armstrong  Cork  Company, 

Corner  Twenty-fourth  and  Railroad  Streets. 


*, 


at, 


U 


A  Credit  Memorandum 


27.  Credit  Memorandum.  Sometimes  when  goods  are 
ordered,  they  do  not  prove  satisfactory  to  the  purchaser  and 
they  are  returned,  or  the  price  is  higher  than  he  expected  to 
pay,  or  for  some  other  reason  a  rebate  or  deduction  is  made  to 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     47 


the  purchaser.  In  such  case  a  memorandum  of  credit  is  made 
out  by  the  party  selling  the  goods  and  sent  to  the  purchaser, 
showing  how  much  credit  or  reduction  will  be  allowed  to  him. 
This  memorandum  of  credit  is  a  statement  quite  like  an 
invoice  in  form,  except  that  it  shows  a  credit  instead  of  a 
debit.  Usually,  but  not  always,  it  is  printed  in  red  or  green, 
or  some  color  different  from  that  of  the  invoice. 

28.  Receipts.  When  one  person  gives  another  money  or 
other  valuables  for  goods  bought  or  labor  performed,  it  is 
customary  for  the  receiver  of  these  valuables  to  give  to  the 
payer  a  written  statement  showing  that  the  debt  has  been 
paid.  This  written  statement  is  called  a  receipt  or  voucher.  A 
receipt  should  contain  the  name  of  the  place  where  written, 
the  date,  the  names  of  the  persons  interested,  and  should  state 
for  what  the  valuable  consideration  was  given.  Blanks  for 
receipts  may  be  obtained  at  any  stationery  store. 

Care  should  be  taken  to  preserve  all  receipts  of  whatever 
kind,  for  if  there  were  no  receipt  or  other  evidence  to  show 
that  the  debt  had  been  paid,  it  would  perhaps  be  necessary  to 
pay  the  account  or  obligation  a  second  time. 

Form  XXXVI. 

RECEIPT  TO  APPLY  ON  ACCOUNT 

$25.00  OGDEN,  UTAH,  July  o,  1902. 

Received  of  Frank  Brown,  twenty-five  dollars,  to  apply  on  his 
account.  PETER  MORRIS. 

Form  XXXVII. 

RECEIPT  IN  FULL  OF  ACCOUNT 

$4.2.35  YORK,  NEB.,  June  25,  1002. 

Received  of  J.  W.  Thompson,  forty-two  and  35-100  dollars,  in 
full  of  account  to  date.  E.  P.  WOODMAN. 


48       A  FIRST  BOOK  IN  BUSINESS  METHODS 

Form  XXXVIII. 
RECEIPT  FOR  MERCHANDISE  ON  ACCOUNT 

$12.60  LAUREL,  DEL.,  March  2,  1002. 

Received  of  George  P.  Simpson,  forty -two  bushels  of  oats  at  joe. 
per  bushel,  to  apply  on  account.  R.  P.  WATERMAN. 

Form  XXXIX. 

RECEIPT  IN  FULL  OF  ALL  DEMANDS 

$345-35  NORFOLK,  VA.,  Nov.  7,  1001. 

Received  of  E.  Norton,  three  hundred  and  forty-five  and  3 5-100 
dollars,  in  full  of  all  demands  to  date.  WM.  DICKINSON. 

Form  XL. 

RECEIPT  FOR  HOUSE  RENT 

$12.50  HELENA,  MONT.,  April 30,  1001. 

Received  of  Samuel  Hopkins,  twelve  and  50-100  dollars  for  rent 
of  house  No.  op  Grove  Street,  for  one  month  ending  April  30,  1001. 

MRS.  SARAH  SMITH. 

Form  XLI. 

RECEIPT  BY  PERSON  WHO  CANNOT    WRITE 

$23.00  SHELBY,  N.  C.,  July  21,  1001. 

Received  of  T.  G.  Benson,  twenty -three  dollars,   in  full  of   all 
demands  to  date.  His 

Witness:  J.  W.  BLUM.  JOHN  X  SMITH. 

S.  E.  SANGREN.  mark 

NOTE. — All  receipts  and  all  other  documents  signed  by  a  person  who  can- 
not write  should  also  be  signed  by  witnesses. 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     49 

Form  XLII. 

RECEIPT  FOR  PAYMENT  OF  ACCOUNT  BY  ONE  PERSON  FOR  ANOTHER 

$15.00  CLINTON,  IND., /#;/.  5,  1002. 

Received  of  A.  J.  Hill,  fifteen  dollars,  to  apply  on  the  account  of 
Hiram  Cooper.  SMITH  MANUFACTURING  Co., 

Per  D.  H.  MOORE. 

Form  XLIII. 

RECEIPT  FOR  PART  PAYMENT  ON  NOTE 

$100.00  ST.  Louis,  Mo.,  Dec.  ij,  1001. 

Received  of  W.  O.  Billings,  one  hundred  dollars,  to  apply  on  his 
note  of  three  hundred  dollars  in  my  favor,  dated  May  3,  i£po. 

H.  C.  HAMILTON. 

NOTE. — The  amount  of  the  payment  on  a  note  should  also  be  indorsed  on 
the  back  of  the  note.  (See  chapter  on  Promissory  Notes.) 

Form  XLIV. 
RECEIPT  FOR  MONEY  PAID  BY  ADMINISTRATOR  OF  AN  ESTATE 

$4.50  HARTFORD,  CONN.,  Jan.  2,  1002. 

Received  of  R.  W.  Brown,  administrator  of  the  estate  of  H.  J. 
Cole,  deceased,  four  and  50-100  dollars,  for  services  as  clerk  at 
auction  of  property  belonging  to  said  estate.  A.  P.  SIMONDS. 

Form  XLV. 

RECEIPT  FOR  MONEY  ADVANCED  ON  CONTRACT 

$25.00  ATLANTIC  CITY,  N.  J.,  June  5,  1002. 

Received  of  Homer  B.  Sparr,  twenty -five  dollars,  as  part  payment 
on  contract  dated  April  14.,  1901,  for  furnishing  100  perch  of  stone 
at  $ i .00  per  perch.  F.  W.  TABOR. 


50       A  FIRST  BOOK  IN  BUSINESS  METHODS 

Form  XLVI. 

RECEIPT  FOR  LOST  OR  STOLEN  NOTE 

$125.00  SAN  FRANCISCO,  CAL.,  August  8,  1001. 

Received  of  James  R.  Powers,  one  hundred  and  twenty-five 
dollars,  in  full  payment  of  his  note  in  my  favor,  dated  July  8, 1000, 
without  interest. 

Said  note  has  been  lost  or  stolen.  G.  H.  PARKER. 

NOTE. — When  payment  is  received  for  a  note  which  has  been  lost  or  stolen, 
it  is  usually  customary  to  give  a  bond,  called  an  indemnity  bond.  (See  form 
in  chapter  on  Promissory  Notes.) 

29.  Orders.  Orders  in  the  commercial  sense  mean  direc- 
tions or  commands  by  one  person  on  another  to  give  to  the 
party  holding  the  order  that  which  is  mentioned  therein. 

The  following  are  common  forms  of  orders : 

Form  XLVII. 
ORDINARY  FORM  OF  ORDER 

DOWAGIAC,  MICH.,  June  6,  1002. 
MR.  W.  J.  BURDICK  : 

Please  deliver  to  W.  Buckingham,  goods  from  your  store  amount- 
ing to  fifteen  dollars,  and  charge  to  my  account. 

L.  THORNTON. 

Form  XLVIII. 

ORDER  PAYABLE  IN  CASH 
$25.00 

MR.  JOHN  C.  SMITH  : 

Please  pay  to  G.  D.  Williams,  twenty -five  dollars,  and  charge  the 

same  to  my  account. 

G.  W.  POWERS. 


BILLS,  INVOICES,  STATEMENTS,  RECEIPTS     51 


From  XLIX. 

FORM  OF  DUE  BILL 

$9-75 

Due  C.  W.  Pennell,  nine  and  75-100  dollars  in  merchandise 
from  my  store. 

O.  D.  SNYDER. 

QUESTIONS  AND  EXERCISES 

/.  What  is  the  difference,  if  any,  between  an  invoice  and 
a  bill? 

2.  What  is  the  difference  between  an  invoice  and  a  state- 
ment of  account  ? 

j.  If  a  man  comes  into  your  wholesale  store  and  buys  a 
bill  of  goods,  should  you  give  him  an  invoice  or  should  you 
make  for  him  a  statement  of  account  ? 

4.  You  sell  a  bill  of  goods  to  R.  W.  Powers,  Oshkosh, 
Wis.,  and  make  out  an  invoice  which  you  send  him,  showing 
the  amount  of  the  bill  to  be  $123.50.    You  afterward  discover 
that  you  have  made  an  error  and  the  amount  should  have 
been  $125.50.     What  would  you  do? 

5.  You  sell  a  bill  of  goods  to  D.  W.  King  &  Co.  of  Toledo, 
O.,  and  send  them  an  invoice  of  the  same.    At  the  expiration 
of  ten  days  you  receive  a  letter  from  them  stating  that  no 
invoice  was  received  from  you.     What  would  you  do  ? 

6.  You  sell  a  bill  of  goods  to  G.  D.  Sturgis,  Osage,  Iowa, 
amounting  to  $534.58,  due  in  thirty  days.     At  the  end  of  that 
time  he  has  not  remitted  for  the  goods.     Send  him  a  state- 
ment of  account.     Write  him  a  letter  .dated  ten  days  later, 
notifying  him  that  his  account  is  past  due   and  make  an 
urgent  request  for  its  payment.     Ten  days  later  telegraph 
him  that  you  are  greatly  in  need  of  the  money  and  must 
have  it.     Make  the  message  as  brief  as  possible. 


52        A  FIRST  BOOK  IN  BUSINESS  METHODS 


7.     What  is  a  credit  memorandum  ? 

&  J.  W.  White  of  Manistee,  Mich.,  buys  a  quantity  of 
groceries  of  the  W.  M.  Hoyt  Co.,  Chicago,  and  from  one 
barrel  of  syrup,  five  gallons  leak  out,  worth  33^  cents  per 
gallon.  Mr.  White  asks  for  a  memorandum  of  credit  cover- 
ing the  amount  of  leakage.  Write  his  letter  to  W.  M.  Hoyt 
Co.  Make  out  the  credit  memorandum  which  the  W.  M. 
Hoyt  Co.  sends  him. 

Q.  Messrs.  Shafter  &  Shafter  of  Salt  Lake  City,  Utah, 
order  of  the  Jackson  &  Steck  Mnfg.  Co.  of  Denver,  Colo.,  20 
disk  harrows  to  be  sent  by  freight.  Write  the  letter  order- 
ing the  goods.  Make  out  the  invoice.  Trade  discount,  \o% 
and  5$.  Terms  of  sale,  2/10,  1/30,  net  60. 


CHAPTER  III. 

BANKING 

30.  Uses  of  Banks.  Banks  are  an  absolute  necessity  to 
the  modern  business  man.  Usually  he  does  not  have  the 
conveniences  for  the  safe  keeping  of  money  that  banks  have, 
and  instead  of  paying  for  the  goods  which  he  buys,  and  the 
bills  which  he  owes,  in  cash,  he  deposits  his  cash  in  the  bank 
and  pays  his  bills  by  checks. 

There  are  many  business  men  who  find  it  necessary  at 
times  to  borrow  money  to  carry  on  their  business.  If  a  man's 
business  reputation  is  good,  or  if  he  can  give  good  security 
for  payment  of  the  money  at  the  expiration  of  the  term  of 
credit,  the  bank  will  loan  him  the  necessary  amount,  and  he 
will  thereby  be  enabled  to  carry  on  a  much  larger  and  more 
successful  business  than  would  otherwise  be  possible.  Banks 
make  collections  of  commercial  paper,  issue  foreign  and  do- 
mestic bills  of  exchange,  and  loan  money. 

There  is  no  branch  of  business  which  is  carried  on  more 
systematically  than  that  of  banking.  Every  one  who  has  an 
income  or  a  salary  sufficient  to  enable  him  to  make  even  a 
small  saving,  should  open  a  bank  account.  By  so  doing  he  not 
only  becomes  accustomed  to  saving,  but  by  keeping  an  account 
with  a  bank  he  acquires  habits  of  promptness  and  accuracy 
which  render  him  more  efficient  and  successful  in  business. 

[53] 


54        A  FIRST  BOOK  IN  BUSINESS  METHODS 


31.  Savings  Banks.    Banks  which  receive  on  deposit  small 
sums  of  money  and  return  the  same  to  depositors  with  a  mod- 
erate rate  of  interest,  are  called  savings  banks.    Some  savings 
banks  will  receive  on  deposit  for  safe  keeping  any  sum  of 
money  from  5  cents  up  to  $1,000,  while  others  prefer  not 
to  receive  sums  of  less  than  $1.00  at  a  time.     These  sums  are 
generally  the  savings  of  laborers  and  those  who  have  only  a 
small  amount  to  deposit  at  a  time,  but  they  soon  begin  to 
draw  interest,  and  if  allowed  to  remain  in  the  bank,  with  a 
little  more  added  each  month,  the  deposit  rapidly  increases  in 
amount  from  year  to  year.     Fractional  parts  of  a  dollar  are 
not  usually  reckoned  as  drawing  any  interest,  and  some  banks 
do  not  allow  interest  on  a  deposit  until  it  amounts  to  $3.00  or 
over. 

32.  Rates  of  Interest  and  Dates  of   Reckoning.      The 

rate  of  interest  varies  somewhat  with  the  different  banks,  but 
usually  it  is  from  3  to  4  per  cent.  Each  bank,  too,  has  its  own 
rules  as  to  the  dates  at  which  calculation  of  interest  is  made 
on  the  various  amounts  which  the  depositors  have  to  their 
credit. 

If  the  dates  for  reckoning  interest  are  January  ist,  April 
ist,  July  ist,  and  October  ist,  money  deposited  March  3ist 
would  begin  to  draw  interest  the  next  day,  but  if  deposited 
April  2d,  it  would  not  begin  to  draw  interest  until  July  ist. 
This,  however,  should  not  deter  one  from  making  a  deposit  at 
any  time,  for  the  money  will  be  in  a  place  of  safety  and  will 
commence  drawing  interest  from  the  beginning  of  the  next 
interest  term. 

If  a  depositor  withdraws  his  money  from  the  bank  before 
the  close  of  any  interest  term,  he  is  not  usually  allowed  inter- 
est for  any  part  of  that  term,  but  the  rules  of  different  banks 


BANKING  55 


vary  in  reference  to  these  matters.  In  some  banks,  money 
deposited  January  loth  would  draw  interest  from  January  ist 
and  for  every  month  thereafter  if  left  for  three  months  or 
longer.  In  other  banks  the  interest  is  reckoned  on  all 
moneys  that  have  been  in  three  or  more  months,  even  if  the 
depositor  has  withdrawn  his  money  before  the  regular  inter- 
est period,  and  the  same  is  placed  to  the  credit  of  his  account. 
If  he  opens  his  account  again,  he  has  this  balance  to  his 
credit. 

33.  Deposit  Book.     Each  depositor  is  furnished  with  a 
book  in  which  he  is  given  credit  for  his  deposits  from  time  to 
time,  and  also  for  whatever  interest  his  money  has  earned  at 
the  end  of  the  term  of  credit. 

If  a  depositor  wishes  to  draw  out  his  money,  the  deposit 
book  must  be  presented  to  the  paying  teller  by  either  the 
depositor  himself  or  some  duly  authorized  person.  The  pay- 
ing teller  makes  an  entry  in  the  book  showing  the  amount 
withdrawn,  and  the  book  is  then  returned  to  the  depositor. 
When  he  has  drawn  out  the  whole  of  his  deposit  the  bank 
keeps  the  book. 

A  depositor  who  places  his  money  in  a  savings  bank  can- 
not withdraw  it  by  check.  A  general  rule  with  savings  banks 
is,  that  if  the  bank  so  desires,  sixty  days'  notice  must  be  given 
before  the  withdrawal  of  money,  but  unless  there  is  a  "run 
on  the  bank"  or  some  unusual  disturbance  of  the  money  mar- 
ket, it  is  paid  promptly  on  request. 

34.  Commercial  Deposit  Banks.    A  commercial  deposit  bank 
is  one  from  which  the  depositor  may  check  out  his  funds  at 
pleasure,  but  no  interest  is  allowed  on  the  money  while  in 
the  bank  unless  his  balance  is  kept  above  a  certain  figure. 


56        A  FIRST  BOOK  IN  BUSINESS  METHODS 


Many  savings  banks  receive  commercial  deposits,  and  many 
commercial  deposit  banks  receive  accounts  for  savings. 

Banks  usually  require  some  evidence  of  the  character  and 
integrity  of  a  depositor  before  opening  an  account  with  him. 
Generally  it  is  only  necessary  that  he  be  introduced  by  some 
person  or  firm  with  whom  the  banker  is  acquainted.  A  depos- 
itor who  opens  an  account  with  a  bank  ought  not  to  expect 
that  the  bank  will  issue  bills  of  exchange  to  him  or  cash  his 
drafts  without  charge.  They  sometimes  do  this  for  cus- 
tomers who  are  heavy  depositors  or  who  borrow  large  sums  of 
money  from  them,  but  they  do  it  only  because  the  patronage 
of  such  depositors  pays  them  for  this  extra  work.  The  cus- 
tomer who  deposits  only  a  small  amount  in  the  bank  and 
withdraws  it  by  checks  within  a  few  days  ought  to  expect  to 
pay  something  to  the  banker  for  the  services  rendered.  Some 
banks  make  charges  for  deposits  of  this  kind. 

35.  Records  of  Deposits.  A  depositor  should  keep  a 
careful  record  of  his  dealings  with  the  bank,  so  that  he  will 
always  know  the  state  of  his  account  and  avoid  overdrawing. 

When  opening  an  account  with  a  bank,  a  depositor  is 
required  to  leave  his  autograph  in  a  record  book  or  upon  a 
signature  card,  authorizing  the  bank  to  accept  said  signature 
in  paying  out  the  depositor's  moneys.  The  bank  then  pre- 
sents the  depositor  with  some  deposit  tickets,  or  deposit  slips, 
as  they  are  sometimes  called,  a  pass  book  or  bank  book,  and  a 
book  of  blank  checks. 

The  deposit  ticket  is  a  blank  form  for  the  depositor  to  fill  out 
when  he  makes  his  deposit.  It  shows  who  the  depositor  is, 
and  the  date  and  kind  of  funds  deposited,  whether  checks, 
specie,  or  currency. 

In  filling  out  the  deposit  slip,  the  bills,  specie,  and  checks 


BANKING 


57 


should  be  entered  separately  as  shown  in  the  accompanying 
form.  When  there  are  several  checks  to  be  deposited,  they 
should  be  arranged  in  the  order  in  which  they  have  been 
entered  on  the  deposit  slip.  The  depositor  should  foot  up  the 

.  Form  L. 

METROPOLITAN  NATIONAL  BANK 


OF  CHICAGO 


DtfosiUd  for  MCOK*  of 


s* 


0V 

0  0 


A  Bank  Deposit  Slip 

various  amounts,  instead  of  leaving  it  for  the  receiving  teller 
at  the  bank  to  do.  When  the  deposit  slip  is  ready,  it  should 
be  taken  to  the  receiving  teller  with  the  funds  which  are  to  be 
deposited,  and  he  will  enter  the  amount  of  the  deposit  in  the 
bank  or  pass  book,  and  return  it,  after  he  has  verified  the 
sums  named  in  the  deposit  slip. 


A  FIRST  BOOK  IN  BUSINESS  METHODS 


36.  The  Bank  Book.     The  bank  book  is  a  small  book  that 
can  be  conveniently  carried  in  the  pocket,  in  which  the 
banker  gives  the  depositor  credit  for  the  amounts  of  money 
which  he  deposits  at  various  times.     This  bank  book  is  the 
only  receipt  which  the  depositor  has  for  the  money  which  he 
has  left  in  the  hands  of  the  banker.    At  the  end  of  each  month 
a  complete  statement  of  each  depositor's  account  is  given  him. 
Usually  the  banker  enters  in  the  bank  book  the  amount  of  the 
checks  which  have  been  paid  and  deducts  this  amount  from 
the  total  of  the  credits,  the  balance  showing  how  much  is 
still  in  the  bank  to  the  credit  of  the  depositor. 

Some  banks  enter  a  list  of  the  checks  in  the  bank  book, 
while  others  list  the  checks  on  a  separate  blank  and  then 
enter  the  whole  amount  only,  in  the  book. 

37.  The  Check  Book.    The  check  book  is  a  book  of  blank 
checks  to  be  used  by  the  depositor  whenever  he  wishes  to 
draw   money   from    the    bank.      Most   check    books  are    so 
arranged  that  the- checks  may  be  torn  out,  leaving  a  stub  in 
the  book  which  shows  in  whose  favor  the  check  is  drawn,  the 
amount,  the  number,  the  date,  and  for  what  purpose  the  check 
is  used.     (See  Form  LI.) 

Form  LI. 


New  Lotnrop.  Mien.. 


Bank  of  New  Lothrop 


-Dollars. 


Form  for  a  Check  as  if  appears  on  the  Check  Book 


BANKING  59 


38.  Directions  for  Writing  Checks.  A  check  is  a  written 
order  on  a  bank  directing  that  a  certain  amount  of  money 
be  paid  to  some  person  named  in  the  check,  or  to  his  order, 
and  signed  by  a  depositor.  No  special  form  of  wording  is 

Form  LII. 


^PEOPLES  BANKING  COMPANY 


tjg2tf^u~ 


<? 

Checks  Payable  to  Cash 

necessary.  The  writing  in  the  body  of  the  check  should 
exactly  agree  with  the  figures  indicating  the  amount  for 
which  the  check  is  drawn. 

The  person  who  draws  the  check  is  called  the  drawer  or 
maker,  and  the  person  to  whom  the  money  is  to  be  paid  is 


60        A  FIRST  BOOK  IN  BUSINESS  METHODS 


called  the  payee.     In  the  first  check,  Form  LIIL,  Arthur  S. 
Norton  is  the  maker  and  Thomas  W.  Miller  the  payee. 

i .  It  is  best  that  the  stub  be  filled  out  first ;  otherwise  it 
may  be  forgotten  and  the  maker  would  have  no  record  of  the 
check. 

Form  LIII. 


Checks  for  Amount  Less  than  One  Dollar 

2.  Care  should  be  taken  to  fill  out  the  stub  in  exact  con- 
formity with  the  check. 

3.  Should  the  person  having  money  deposited  in  a  bank 
wish  to  draw  out  some  for  his  own  use,  he  makes  the  check 
payable  to  "  Cash,"  or  "  Myself,"  as  shown  in  Form  LII. 


BANKING  61 


4.  Sometimes  it  is  necessary  to  write  a  check  for  a  smaller 
amount  than  a  dollar.     In  that  case  the  words  should  be 
written  out  in  full  as  in  Form  LIIL,  and  the  word  "Dollars" 
erased  by  drawing  a  pen  through  it. 

5.  If  the  drawer  of  the  check  desires  to  do  so,  he  may 
specify  in  the  check  that  for  which  it  is  given,  as  in  Form 
LIV. 

Form  LIV. 


Check  Specifying  for  what  Money  is  to  be  Used 

6.  The  amount  of  a  check  should  be  written  twice  —  once 
in  figures  and  once  in  words. 

7.  The  check  should  be  carefully  written  so  that  there 
may  be  no  question  in  reference  to  the  amount  or  date. 

8.  In  writing  a  check  or  note,  always  begin  at  the  extreme 
left  and  draw  lines  in  the  blank  space  after  the  amount  in 
figures  or  letters,  so  that  no  one  can  fraudulently  fill  in  the 
blank  spaces  and  make  the  check  or  note  call  for  a  larger 
amount   than   it   should.     If   the    amount   of   the   check  is 
"  raised  "  by  the  skillful  filling  up  of  the  blank  spaces,  and  the 
signature  is  genuine,  the  bank  cannot  be  blamed  for  making 
payment,  and  the  loss  will  properly  fall  on  the  drawer  of  the 
check,  because  it  came  from  his  negligence. 


62        A  FIRST  BOOK  IN  BUSINESS  METHODS 


If  a  check  for  $5.00  were  drawn  and  a  blank  space  left  as  in 
Form  LV.,  the  amount  of  the  check  could  be  easily  "  raised  " 
to  a  much  larger  amount. 

Form  LV. 


S. 


CD 

CD 


Union  Stock  Yards. 


ih  Afwnaliank  0f 


Checks  Incorrectly  Drawn 

If  the  blank  spaces  were  filled  in  as  shown  in  Form  LVL, 
it  would  be  very  difficult  to  change  either  the  writing  or  the 
figures  without  detection. 

As  an  added  precaution  against  alteration,  machines  are 


BANKING 


Form  LVI. 


r°WiNNEBAGO  NATIONAL  BANK 
ROCKFORD,  ILL 


\^^.     sC~/  ^—^ZZ-irT&tj&^^&t/* 


Checks  Correctly  Drawn 


64       A  FIRST  BOOK  IN  BUSINESS  METHODS 


sometimes  used  to  stamp  or  cut  out  the  figures  showing  the 
amount  of  the  check. 

If  the  amount  in  figures  does  not  correspond  with  the 
amount  in  writing,  the  written  amount  will  be  considered 
correct. 

9.  Some  checks  are  made  payable  to  "  bearer,"  and  some 
to  the  "order"  of  the  person  in  whose  name  they  are  drawn. 
If  they  are  made  payable  to  the  order  of  the  payee,  he  must 
write  his  name  on  the  back  of  the  check  before  he  can  get 
the  money  on  it,  or,  if  he  wishes,  he  may  make  the  check 
payable  to  some  other  person,  by  indorsing  the  check  as  in 
Form  LVII. 

Form  LVII. 


An  Indorsed  Check 

39.  The  Indorsement.  The  word  "  indorse  "  comes  from 
two  Latin  words,  in  and  dorsum,  which  mean,  when  com- 
bined, on  the  back.  Then  to  indorse  means  to  write  on  the 
back,  and  the  purpose  of  indorsement  is  to  transfer  the  own- 
ership of  the  paper  so  indorsed.  There  are  several  different 
kinds  of  indorsement. 


BANKING  65 


Example:  In  the  form  of  indorsement  given  in  Form  LVII, 
A.  J.  Williams  transfers  the  ownership  of  the  check  by  indorsing 
it  to  J.  B.  Clay,  who  in  turn  may  transfer  his  ownership  to  some 
other  person,  and  so  on.  Checks  may  have  any  number  of  indorse- 
ments. Any  person  presenting  a  check  which  has  been  properly 
indorsed  over  to  him,  to  the  bank  on  which  it  is  drawn,  may 
receive  the  money. 

An  indorsement  of  a  check  is  either  an  indorsement  in  full 
or  an  indorsement  in  blank.     Form  LVII.  is  an  example  of  an* 
indorsement  in  full,  because  the  check  is  made  payable  by 
the  indorsement  to  a  particular  person  or  his  order. 

40.  Payable  to  Bearer  or  Order.  To  indorse  a  check  in 
blank,  the  person  indorsing  writes  his  name  across  the  back 
of  the  check,  and  any  person  holding  it  can  receive  the 
money  on  presenting  it  at  the  bank.  If  a  check  is  made 
payable  to  "  beater,"  it  need  not  be  'indorsed  before  present- 
ing it  at  the  paying  teller's  window  at  the  bank  to  get  the 
money  on  it.  Most  banks,  however,  prefer  to  have  an  indorse- 
ment in  blank  on  the  check  even  if  it  is  made  payable  to 
"bearer."  One  should  never  indorse  a  check  in  blank  until 
just  before  presenting  it  to  the  bank  for  payment,  for  if  the 
check  should  be  lost  when  so  indorsed,  it  may  be  paid  to  the 
finder. 

It  is  always  safer,  both  in  writing  and  indorsing  checks, 
to  make  them  payable  to  the  order  of  the  person  who  is  to 
receive  the  money,  for  he  must  in  turn  indorse  it,  and  this 
indorsement  serves  as  a  receipt  for  the  payment.  If  a  person 
loses  a  check  made  payable  to  his  order,  the  maker  can  give 
him  another  without  risk  to  himself,  by  simply  writing  across 
the  face  of  the  second  check,  so  that  it  may  be  plainly  seen, 
the  word  "  Duplicate."  The  bank  on  which  it  is  drawn  should 


66        A  FIRST  BOOK  IN  BUSINESS  METHODS 


De  notified  of  the  loss  of  the  check  at  once,  in  writing,  giving 
a  description  of  the  original  check,  and  a  request  that  it  be 
not  paid.  Some  banks  require  that  a  bond  shall  be  issued 
before  stopping  the  payment  of  a  check. 

NOTE. —  For  other  forms  of  indorsement,  see  chapter  on  Promissory  Notes. 

41.  Post-Dated  Checks.    A  check  is  usually  dated  on  the 
day  on  which  it  is  drawn  and  is  payable  on  demand,  but  some- 
times it  bears  a  different  date. 

If  a  check  drawn  on  the  ist  of  March  were  dated  March 
loth,  it  would  be  a  post-dated  check,  and  would  show  on  its 
face  that  it  should  not  be  paid  before  the  loth  of  March. 

If  a  person  buys  an  article  and  is  not  sure  of  its  value,  he 
can  give  in  payment  a  post-dated  check;  then  if  he  finds 
that  the  seller  has  cheated  him  and  the  article  is  not  worth 
what  he  agreed  to  pay  for  it,  he  can  stop  the  payment  of  the 
check. 

Never  give  your  check  dated  ahead  unless  sure  that  you 
will  have  money  enough  on  deposit  at  that  date  to  meet 
the  obligation.  Through  some  misfortune  you  might  have 
the  check  returned  unpaid,  and  thus  your  credit  would  be 
injured.  It  is  advisable  for  one  to  be  very  careful  about 
receiving  post-dated  checks.  In  fact  it  is  a  good  business 
maxim  never  to  give  or  accept  them. 

42.  Checks  Should  be  Cashed  Promptly.    Checks  should 
be  presented  for  payment  at  the  bank  within  a  reasonable 
time.     If  the  maker  of  the  check  be  a  responsible  party  and 
his  credit  good,  it  would  not  be  necessary  to  have  the  check 
cashed  immediately;   but  if  there  be   any  doubt  as  to  his 
responsibility,  it  should  be  cashed  at  once. 

If  the  person  in  whose  favor  the  check  is  drawn  does  not 


BANKING 


67 


present  it  for  payment  promptly  and  the  bank  then  becomes 
insolvent,  the  drawer  cannot  be  held  responsible  for  the 
amount  of  the  check ;  for  if  the  maker 'of  the  check  has  funds 
in  the  bank  and  the  payee  has  sufficient  time  to  get  his  check 
cashed  before  the  bank  fails,  and  he  does  not  do  so,  the  maker 
is  not  at  fault. 

Form  LVIII. 


A  Check  similar  to  a  Bank.  Draft 

43.  Payment  of  Exchange.  Most  checks  now  used  by 
business  men  are  similar  to  bank  drafts.  (See  Form  LVIII.) 

Some  business  men  draw  their  checks  payable  to  the 
order  of  themselves,  and  then,  by  indorsement,  make  them 
payable  to  the  order  of  the  person  to  whom  they  wish  to 
make  the  remittance.  (See  Form  LIX.) 

When  these  checks  state  on  their  face  that  they  are  "  Pay- 
able in  New  York  or  Chicago  exchange  at  par,"  the  payee 
is  not  required  to  pay  exchange  on  them  when  he  has 
them  cashed  at  his  bank.  They  pass  through  the  banks 
without  payment  of  exchange  by  the  payee,  because  they  are 
payable  in  New  York  or  Chicago  exchange  at  par,  and  they 
practically  state  on  their  face  that  the  amount  called  for  is 


68        A  FIRST  BOOK  IN  BUSINESS  METHODS 


not  only  the  amount  shown  in  figures,  but  an  amount  suffi- 
cient to  pay  the  exchange  also.  If  any  charges  are  made  for 
exchange  on  such  checks,  they  are  made  against  the  drawer 
of  the  check  by  the  bank  on  which  it  is  drawn. 

Form  LIX. 


A  Check  drawn  payable  to  the  order  of  the  signer 

44.  Certified  Checks.  A  certified  check  is  an  ordinary 
check  upon  which  the  cashier  or  teller  of  the  bank  on  which 
it  is  drawn  has  written  or  stamped  the  word  "Certified"  or 
"Good  when  properly  indorsed,"  or  other  equivalent  words, 
with  the  date  and  his  signature.  By  certifying  the  check, 
the  banker  guarantees  that  it  will  be  paid  on  presentation. 
Usually  an  ordinary  check  will  not  be  paid  by  the  bank 
unless  the  depositor  has  sufficient  funds  to  his  credit  to  cover 
the  amount  of  the  check. 

A  business  man  may  wish  to  present  his  check  for  pay- 
ment at  some  bank  other  than  that  in  which  his  money  is 
deposited  and  which  is  some  distance  from  his  home.  As  he 
does  not  wish  to  carry  the  money  around  with  him,  he  can 


BANKING 


69 


have  his  check  certified  at  his  bank  if  he  has  that  amount  of 
money  on  deposit,  thus  doing  away  with  much  of  the  danger 
of  loss  or  theft  and  also  the  inconvenience  of 'carrying  money. 

Example :  Suppose  Mr.  John  Wood  sells  a  pair  of  horses  to  a 
stranger  for  $300  and  instead  of  receiving  cash  payment  for 
the  horses,  the  stranger  hands  to  Mr.  Wood  a  check  on  the  First 
National  Bank  for  the  amount.  Before  accepting  the  check  in 
payment  for  the  horses,  Mr.  Wood  ought  to  be  sure  that  the  check 
is  good.  He  may  ask  to  have  the  check  certified.  If  the  stranger 

Form  LX. 


,  7  /;. — f-i      /?  '     ' 


A  Certified  Check 

should  send  the  check  to  the  bank  to  have  it  certified  and  it  is 
good,  the  cashier  or  the  teller  of  the  bank  would  stamp  or  write 
across  the  face  of  the  check,  usually  in  red  ink,  the  words  "  Certi- 
fied," or  "Good,"  or  "Good  when  properly  indorsed,"  with  the 
date  and  his  signature.  Mr.  Wood  need  then  have  no  hesitancy 
in  accepting  the  check,  for  the  bank  would  be  responsible  for  its 
payment  if  the  signature  of  the  cashier  or  teller  were  genuine. 

If  you  receive  a  check  which  you  do  not  wish  to  use  for 
some  time,  it  is  best  to  have  it  certified.  The  bank  will  then 
charge  the  account  of  the  man  who  drew  the  check  for  the 


70       A  FIRST  BOOK  IN  BUSINESS  METHODS 


amount  of  it,  and  lie  cannot  draw  all  his  money  from  the 
bank  and  leave  nothing  there  for  the  payment  of  the  check 
which  you  hold. 

45.  Voucher  Checks.     A  form  of  check,  called  a  voucher 
check,  has  come  into  use  within  the  past  few  years  and  is 
being  used  more  and  more  by  business  men. 

The  object  of  a  voucher  check  is  to  show  for  what  purpose 
the  check  is  issued  or  what  bill  that  particular  check  is 
intended  to  pay.  Usually  the  back  of  the  check  is  used  to 
make  a  notation  upon,  showing  what  bill  or  account  is 
intended  to  be  paid.  Some  of  these  checks  are  very  large 
and  so  ruled  that  a  complete  statement  of  an  account  may 
be  made  if  desired. 

46.  Certificate  of  Deposit.    When  money  is  deposited  in 
a  bank  which  is   not  a  savings  bank,  with  the  intention  of 
leaving  it  there  for  several  weeks  or  months,  the  banker 

Form  LXI. 


Certificate    of  Deposit 


BANKING  71 


usually  issues  to  the  person  depositing  the  money,  a  certificate 
of  deposit  as  shown  in  Form  LXI. 

If  the  holder  of  a  certificate  of  deposit  wishes  to  draw  his 
money  from  the  bank,  he  must  return  his  certificate  to  the 
bank.  He  cannot  get  the  money  by  drawing  a  check  on  the 
bank.  He  may,  however,  if  he  chooses  to  do  so,  sell  his 
certificate  of  deposit  to  some  other  person,  and  transfer  it 
by  indorsement  to  the  purchaser.  If  a  person  holding  a 
certificate  of  deposit  wishes  to  draw  a  part  of  the  amount 
from  the  bank,  the  banker  sometimes  pays  the  amount  desired 
and  indorses  the  same  on  the  back  of  the  certificate,  but  usually 
the  certificate  of  deposit  is  taken  up  and  a  new  one  issued. 

47.  Additional  Directions  for  Writing  Checks.  There  is 
no  commercial  paper  more  common  or  more  universally  used 
than  checks;  it  is,  therefore,  necessary  that  all  should  be 
familiar  with  their  use  and  understand  how  to  indorse  them 
properly.  By  such  a  knowledge  one  may  avoid  annoyance 
and  possible  financial  loss.  Special  attention  is  called  to  the 
following  suggestions : 

1.  Before  depositing  a  check  or  cashing  it  at  the  bank 
it  must  be  indorsed.     This  indorsement  is  valuable  as  a 
receipt  to  the  maker  and  as  evidence  of  ownership  to  the 
banker. 

2.  In  indorsing  a  check,  write  across  the  back  of  the  check, 
not  lengthwise. 

3.  Do  not  indorse  wrong  end  up,  write  across  the  top  or 
head  of  the  check,  about  an  inch  from  the  end.     The  head  of 
a  check  is  the  end  at  the  left  as  it  lies  before  you  on  the  desk. 
Now  to  indorse  it,  turn  it  over,  not  endwise,  but  directly 
toward  you. 

4.  Always  indorse  a  check  by  writing  your  name  exactly 


72        A  FIRST  BOOK  IN  BUSINESS  METHODS 


as  it  appears  on  the  face.  If  your  name  is  John  T.  Smith,  and 
your  name  appears  on  the  check  as  J.  T.  Smith,  you  may  in- 
dorse it  as  J.  T.  Smith.  If  payable  to  John  T.  Smith,  indorse 
it  as  John  T.  Smith.  If  your  name  is  spelled  incorrectly  on 
the  check,  indorse  it  twice,  spelling  it  once  as  it  is  spelled  on 
the  check,  and  once  correctly. 

Form  LXII. 


A  Correctly  Indorsed  Check 

48.  Safety  Deposit  Vaults.  In  nearly  all  cities,  and  some 
of  the  larger  towns,  are  safety  deposit  vaults,  which  are  very 
convenient  places  for  the  safe  keeping  of  insurance  policies, 
wills,  securities,  jewelry,  and  other  valuables.  These  vaults 
are  fireproof,  and  are  provided  with  all  the  safeguards  neces- 
sary for  absolute  protection. 

Any  person  may  rent  a  box  or  drawer  in  a  vault  of  this 
kind  at  a  small  cost  per  annum.  Usually  the  rent  is  very 
reasonable,  being  from  $3.00  up  to  $25.00  or  $30.00  per  year, 
depending  upon  the  size  of  the  box  or  drawer  rented. 

Each  renter  is  provided  with  a  key  to  the  drawer  which 
he  rents,  and  no  person  except  himself  or  his  duly  authorized 


BANKING  73 


agent  can  have  access  to  his  valuables.  Even  if  his  key  should 
be  found  by  some  other  person,  that  person  would  not  be 
allowed  access  to  the  box  by  the  man  in  charge  unless  he 
could  show  that  he  had  a  right  to  be  admitted  there. 

NOTE. — For  Letters  of  Credit,  Travelers'  Checks,  and  Bills  of  Exchange, 
see  Chapter  VI. 

EXERCISES  ON  CHAPTER  III. 

/.     What  is  a  check  ? 

2.     Describe  the  process  of  depositing  money  in  a  bank, 
j.     What  is  the  difference  between  a  bank  book  and  a 
check  book  ? 

4.  Is  it  important  that  the  stub  of  the 'check  should  be 
written  up  first  ?    What  should  the  stub  contain  ? 

5.  What  is  the  difference  between  a  savings  bank  and 
a  commercial  deposit  bank  ? 

6.  What  is  meant  by  an  indorsement  ?    Name  two  kinds 
of  indorsement  and  the  effect  of  each. 

7.  Where  is  the  proper  place   on  a  check  to  make  an 
indorsement  ? 

8.  What  is  an  indorsement  in  blank  ?    What  is  an  indorse- 
ment in  full  ? 

<?.  If  you  receive  a  check  on  which  your  name  is  mis- 
spelled or  there  is  an  error  in  one  of  the  initials,  how  would 
you  indorse  the  check  ? 

10.    What  is  a  post-dated  check  ? 

//.  Would  it  make  any  difference  to  the  person  in  whose 
favor  a  check  is  drawn,  whether  it  is  made  payable  to  his 
order  or  to  bearer?  Would  there  be  any  advantage  to  the 
person  drawing  the  check? 

12.     If  you  lose  a  check  made  payable  to  your  order,  what 


74       A  FIRST  BOOK  IN  BUSINESS  METHODS 


ought  you  to  do  ?  Could  you  stop  the  payment  of  the  check  ? 
How  could  payment  be  stopped  ? 

ij.  If  you  give  a  check  on  the  Second  National  Bank  in 
favor  of  John  P.  Wood,  and  he  loses  it,  what  ought  you  to  do 
if  he  asks  you  for  another? 

14.    Who  is  the  drawer  of  a  check  ?    Who  the  payee  ? 

75.  What  is  a  certified  check,  and  what  is  the  advantage 
of  having  a  check  certified  ? 

16.    What  is  a  certificate  of  deposit  ? 

77.  If  you  deposit  money  in  a  bank  and  receive  a  certifi- 
cate of  deposit  in  place  of  it,  how  can  you  draw  the  money 
from  the  bank  ?  Can  you  draw  it  by  check  ? 

1 8.     How  would  you  write  a  check  for  28  cents  ? 

79.  How  would  you  write  a  check  to  draw  money  for  your 
own  use  ? 

20.  If  you  receive  a  check  from  John  D.  Wood  for  $50.00, 
how  soon  ought  this  check  to  be  cashed  ? 

21.  Write  a  letter  to  H.  O.  Stone  &  Bro.,  Chicago,  inclosing 
your  check  in  their  favor  in  payment  of  a  bill  of  goods  bought 
some  time  since,  amounting  to  $16.57.     Write  the  check  on  a 
blank  piece  of  paper  and  inclose  it  in  a  letter. 

22.  Write  out  a  deposit  slip,  on  a  blank  piece  of  paper, 
depositing  in  the  Maryland  National  Bank  of  Baltimore,  $28.00 
in  silver,  $25.00  in  bills,  and  the  following  checks :  One  on  the 
Second  National  Bank  of  Baltimore  for  $543.21  ;  one  on  the 
Fort  Dearborn  National  Bank  of  Chicago  for  $26.43,  and  one 
on  the  Chemical  National  Bank  of  New  York  for  $231.67. 

23.  You  order  a  bill  of  goods  from  Sargent  &  Larson  of 
St.  Joseph,  Mo.,  amounting  to  $545.50,  and  you  pay  for  the 
same  by  certified  check.     Write  them  a  letter  explaining  the 
matter,  and  inclosing  the  certified  check. 

2/j..    When  your  bank  book  is  written  up  and  returned  to 


BANKING  75 


you  by  the  bank,  you  find  that  your  bank  book  and  check  book 
do  not  agree.    What  would  you  do  under  these  circumstances  ? 

25.  Do  banks  pay  interest  on  deposits,  and  if  so,  when  ? 

26.  What  are  the  advantages  of  banks  to  a  community  ? 

27.  In  what  way  do  checks  serve  as  receipts  ? 

28.  Would  you  expect  to  find  many  banks  in  Turkey  or 
Africa  ?    Explain. 

29.  What  does  a  large  number  of  banks  in  a  community 
indicate  ? 

GENERAL  REVIEW  EXERCISES 

/.  What  is  the  size  of  letter  paper  generally  used  for  a 
business  letter  ? 

2.    How  much  margin  should  there  be  at  the  left  ? 
j.     How  much  margin  at  the  right  ? 

4.  How  should  the  sheet  be  folded  ? 

5.  What  is  the  address  of  a  letter  ? 

6.  What  is  the  salutation  of  a  letter  ? 

7.  What  is  a  title  ? 

8.  How  should  you  address  a  letter  to  your  member  of 
Congress  ? 

p.  Write  a  short  letter  to  S.  R.  Clark  calling  his  attention 
to  the  fact  that  he  is  owing  nearly  $30.00  rent,  and  urge  him 
to  make  payment  of  same. 

10.  Write  to  J.  W.  Stone  &  Co.  and  inclose  a  check  for 
$25.00,  stating  that  the  same  is  to  apply  on  your  account. 

11.  What  is  a  statement  of  account  ? 

12.  What  is  an  invoice  ? 

ij.  C.  W.  Wilson  buys  of  you  150  barrels  of  flour  at  $6.50 
per  barrel.  Should  he  receive  an  invoice  or  a  statement  of 
account  ? 


76        A  FIRST  BOOK  IN  BUSINESS  METHODS 


14.  D.  J.  Cutler  &  Co.  of  Dayton,  O.,  ask  for  a  rebate  of 
$10.00  on  their  invoice  of  August  4th,  claiming  goods  were 
damaged  by  not  being  properly  packed.  Send  them  a  credit 
memorandum. 

75.  G.  H.  Thornton  of  Bloomington,  111.,  bought  of  you 
January  loth,  a  bill  of  goods  amounting  to  $245.30,  on  sixty 
days'  time.  March  3Oth  he  paid  $50.00,  and  June  I2th,  $45.00. 
Send  him  a  statement  of  his  account,  and  write  urging  him 
to  pay  the  balance  at  once. 

16.  Bell  &  Johnson,  Fort  Wayne,  Ind.,  buy  of  you  50  bar- 
rels of  flour  at  $5.75  per  barrel,  on  which  you  allow  them  a 
cash  discount  of  6  per  cent  if  paid  within  ten  days  or  5  per 
cent  if  paid  within  thirty  days.  Make  out  the  invoice. 

77.  At  the  end  of  five  days  the  invoice  is  returned  to  you, 
the  firm  claiming  that  they  were  to  be  allowed  a  trade  dis- 
count of  5  per  cent  in  addition  to  the  cash  discount.  Send 
them  a  corrected  invoice. 


CHAPTER  IV. 

PROMISSORY  NOTES,  INTEREST,  BANK  DISCOUNT, 
PARTIAL  PAYMENTS 

49.  Promissory  Notes.     Many  times  in  business  trans- 
actions a  person  wishes  to  buy  something  and  does  not  have 
the  money  on  hand  with  which  to  pay  for  it  at  the  time  of 
purchase.     If  the  business  reputation  of  the  buyer  is  good,  the 
seller  may  agree  to  accept  the  written  promise  of  the  buyer 
to  pay  the  amount  of  the  purchase  at  some  future  time. 

This  written  promise  to  pay  is  called  a  promissory  note. 
The  seller  of  the  goods  would  prefer  to  take  the  written 
promise  of  the  buyer  rather  than  a  mere  verbal  one,  because 
the  written  promise  would  usually  be  sufficient  evidence  in 
court  to  prove  that  the  sale  had  actually  been  made,  while 
the  mere  verbal  promise  would  have  to  be  proved  by  other 
evidence  should  any  question  ever  arise  concerning  it. 

50.  Uses  of  Promissory  Notes.     It  is  more  convenient  to 
sell  or  transfer  the  ownership  of  a  promissory  note  than  an 
ordinary  account.     The  original  payee  of  a  promissory  note 
can  secure  money  on  the  note  by  transferring  his  right  to 
some  other  person,  at  any  time  after  the  note  is  made.     Most 
business  men  prefer  a  promissory  note  to  a  running  account. 

A  promissory  note  then  is  a  written  promise  to  pay  a 
specified  sum  of  money  at  a  specified  time.  The  person  who 

[77] 


78        A  FIRST  BOOK  IN  BUSINESS  METHODS 


signs  the  note,  or,  in  other  words,  the  person  who  promises  to 
pay,  is  called  the  maker,  and  the  person  who  is  to  receive  the 
money  is  called  the  payee. 

Example  :  If  Mr.  N.  C.  Evans  buys  a  horse  of  Mr.  John  Crose 
for  $100  and  is  not  prepared  to  pay  the  money  when  he  gets 
the  horse,  he  may  give  his  promissory  note  for  the  amount.  The 
note  may  be  written  with  pen  or  pencil,  but  it  is  much  preferable 
to  write  it  with  ink  on  good  durable  paper. 

Form  LXIII. 


Ordinary  Promissory  Note 


The  note  given  by  Mr.  Evans  to  Mr.  Crose  would  be  something 
like  Form  LXIII. 

Now,  if  Mr.  Evans  makes  a  payment  on  this  note  of  $25.00  to 
Mr.  Crose,  August  12,  1902,  Mr.  Crose  would  write  across  the  back 
of  the  note,  "  Received  on  the  within  note  $25.00,  August  12,  1902," 
and  sign  his  name  as  shown  in  Form  LXIV. 

The  maker  of  a  promissory  note  cannot  be  hindered  from 
selling  all  his  goods  and  leaving  the  country  before  the  ma- 
turity of  the  note,  if  he  chooses  to  do  so,  while  with  an  ordinary 
account  in  which  no  time  of  payment  is  specified,  the  amount 
of  the  account  is  due  and  payable  at  any  time. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      79 


51.  Indorsement  of  a  Note.  When  a  person  indorses  a 
note,  that  is,  writes  his  name  across  the  back  of  it,  he  becomes 
responsible  for  its  payment  in  case  the  original  maker  does 
not  pay  when  the  note  becomes  due.  By  writing  his  name 
across  the  back  of  the  note  he  virtually  says  to  all  future 
holders  that  he  knows  the  maker  of  it  and  that  he  believes  he 
will  pay ;  and  that  if  the  maker  does  not  pay,  he,  the 


Partial  Payment  of  a  Note  Indorsed  on  the  Back 

indorser,  will  do  so.  The  laws  regarding  the  indorsement  of 
notes  are  somewhat  different  in  the  different  states.  In  most 
states  the  indorser  of  a  note  cannot  be  held  responsible  for  its 
payment  unless  the  holder  gives  him  notice  that  the  maker 
has  refused  to  pay,  and  this  notice  must  be  sent  to  the  indorser 
within  twenty-four  hours  after  the  note  becomes  due.  This 
law  prevails  in  all  states  where  no  statutory  law  has  been 
enacted  making  protest  and  notice  unnecessary. 

Each  indorser  is  responsible  to  all  indorsers  who  follow 
him  and  also  to  the  holder  of  the  note  at  its  maturity. 


8o        A  FIRST  BOOK  IN  BUSINESS  METHODS 


Example :  Should  Mr.  Crose  wish  to  sell  the  note  outlined  in 
the  foregoing  section  to  G.  A.  Allen  and  obtain  the  balance  of  the 
amount  before  the  note  is  due,  he  would  write  across  the  back  of 
the  note,  "  Pay  to  G.  A.  Allen  or  order,"  and  sign  his  name.  The 
effect  of  this  indorsement  would  be  to  transfer  the  ownership  of 
the  note  from  Mr.  Crose  to  Mr.  Allen. 

This  form  of  indorsement  is  called  an  indorsement  in  full,  and 
no  one  can  collect  the  amount  due  on  this  note  until  G.  A.  Allen 
writes  his  name  across  the  back  of  the  note.  A  note  may  have 
any  number  of  indorsements.  You  will  remember  that  the  trans- 
fer of  the  ownership  of  checks  is  accomplished  by  the  same  method 
(see  §§  39  and  40). 

Had  Mr.  Crose  simply  written  his  name  across  the  back  of  the 
note  when  he  sold  it  to  Mr.  Allen,  the  indorsement  would  be 
called  an  indorsement  in  blank,  and  Mr.  G.  A.  Allen  or  any  one 
else  who  held  it  could  collect  the  amount  of  Mr.  Evans  when  the 
amount  became  due. 

If,  however,  Mr.  Crose  had  written  across  the  back  of  the  note, 
"Pay  to  G.  A.  Allen,  only,"  the  indorsement  would  be  called  a 
restrictive  indorsement,  and  Mr.  Allen  would  be  the  only  person 
who  could  collect  from  the  maker  when  the  note  became  due, 
unless  he  chose  to  transfer  his  interest  in  the  note  to  some  other 
person,  by  assignment. 

If  the  indorser  did  not  wish  to  become  responsible  for  the 
payment  of  the  note,  he  would  write  just  above  his  name,  "With- 
out recourse  to  me,"  or  "Without  recourse."  This  is  called  a 
qualified  indorsement. 

52 .  Negotiable  Notes.  This  form  of  note  which  we  have 
been  considering,  like  all  others  of  a  similar  nature,  is  called  a 
negotiable  note  because  it  may  be  sold  or  transferred  from 
one  person  to  another ;  but  in  order  to  be  negotiable  the  words 
"  Pay  to  bearer,"  or,  "  Pay  to  the  order  of  -  "  (the  person 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      81 


who  is  to  receive  the  money,  i.  e.,  the  payee),  must  appear 
on  the  face  of  the  note.  On  the  other  hand  a  note  which  is 
made  payable  to  the  person  named  in  the  note,  without  the 
word  " bearer"  or  " order"  appearing  on  its  face,  is  called  a 
non-negotiable  note,  because  its  ownership  cannot  be  passed 
from  one  person  to  another. 

Negotiable  notes,  checks,  and  also  drafts,  which  are  con- 
sidered in  the  next  chapter,  are  alike  in  this  respect,  that  they 
may  be  transferred  from  one  person  to  another  and  that  the 
maker  is  responsible  for  payment  to  the  holder  of  the  paper 
at  the  time  of  its  maturity.  All  these  forms  are  called,  tech- 
nically, commercial  papers. 

Form  LXVII. 
Form  LXV. 

INDORSEMENT  IN  FULL 
INDORSEMENT  IN  BLANK  „ 

A.  B.  VORHES.  Pay  toj'  C'J°nes>  or  order- 

H.  GILBERT. 

Form  LXVI.  Form  LXVIII. 

QUALIFIED  INDORSEMENT  RESTRICTIVE  INDORSEMENT 

Without  recourse  to  me.  Pay  to  J.  R.  Smith,  only. 

M.  A.  LEA CH.  ALBERT  WILLIAMS. 

53.  Joint  Makers.  Sometimes  the  payee  will  not  receive 
a  promissory  note  from  the  maker  unless  the  maker  has  some 
one  sign  the  note  with  him  to  insure  its  payment  when  due. 
When  two  persons  sign  a  note,  they  are  called  joint  makers. 
If  one  signs  his  name  on  the  back  cf  a  note  before  it  is  delivered 
to  the  payee,  he  is  not  merely  an  indorser  (see  §  51),  but  a  joint 
maker ;  and  if  one  of  the  makers  refuses  to  pay  the  note  when 
it  becomes  due,  the  person  who  signs  with  him  will  have  to 
pay,  whether  he  is  notified  of  the  other's  failure  to  pay  the 
note  when  it  falls  due  or  not. 


82        A  FIRST  BOOK  IN  BUSINESS  METHODS 


We  have  seen  that  notes  are  divided  into  at  least  two 
classes,  negotiable  and  non-negotiable.  They  are  further 
divided  into  demand  and  time  notes,  and  these  may  be  either 
interest  bearing  or  non-interest  bearing. 

54.  Demand  Notes.  Sometimes  the  maker  of  a  note 
promises  to  pay  the  amount  named  in  the  note  at  any  time 
when  payment  is  demanded.  In  such  cases  the  note  is  usu- 
ally written  like  the  form  given  below,  and  it  Is  called  a 
demand  note. 

Form  LXIX. 


A  Demand  Note 


A  note  written,  "One  day  after  date  I  promise  to  pay," 
etc.,  is  also  called  a  demand  note.  Demand  notes  are  usually 
given  when  money  is  borrowed  for  a  short  time  only. 

Days  of  Grace.  By  this  term  is  meant  an  additional  period 
of  three  days  from  the  maturity  of  the  note,  gratuitously 
allowed  to  the  maker  to  enable  him  to  provide  the  funds  for 
payment.  Days  of  grace  were  formerly  allowed  in  all  cases, 
but  the  present  tendency  is  to  abolish  them,  and  this  has  been 
done  in  many  states. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      83 


55.  Interest.     Interest  is  a  sum  paid  for  the  use  of  money; 
it  may  be  for  money  borrowed,  or  for  accounts  which  are  past 
due,  or  for  other  obligations.    The  money  lent  or  due  is  called 
the  principal,  and  the  sum  paid  for  the  use  of  it  is  called  the 
interest.     Interest  is  reckoned  at  a  certain  ratio,  or  per  cent  of 
the  principal,  yearly. 

Simple  interest  is  that  sum  which  is  paid  for  the  use  of  the 
principal  only. 

Sometimes  the  interest  is  not  paid  when  it  becomes  due, 
but  is  added  to  the  principal,  the  whole  sum  then  drawing 
interest.  When  interest  accumulates  on  interest  in  this  way 
it  is  called  compound  interest.  The  collection  of  compound 
interest  cannot  be  enforced,  as  the  laws  of  the  different 
states  generally  prohibit  it. 

The  usual  custom  is  to  charge  simple  interest  only,  and  if 
the  interest  is  not  paid  when  due,  interest  on  that  unpaid 
interest  is  not  generally  collectible. 

56.  Bank  Discount.    When  money  is  borrowed  from  a 
bank,  it  is  customary  for  the  borrower  to  give  his  note  for 
the  amount,  and  instead  of  adding  the  interest  the  banker 
deducts  a  discount  from  the  amount  of  the  note  and  pays  to 
the  borrower  the  remainder. 

If  a  business  man  should  give  his  note  at  the  bank  for 
$500,  payable  in  thirty  days,  the  note  would  be  drawn  like 
Form  LXX.  This  note  would  not  draw  any  interest  until 
due,  but  the  banker  would  deduct  from  the  amount  a  certain 
percentage  or  discount,  and  this  is  called  bank  discount.  It  is 
simple  interest  on  the  principal  taken  in  advance,  and  in 
states  where  three  days  of  grace  are  allowed,  it  is  reckoned 
for  three  days  more  than  the  time  specified  in  the  note. 

The  legal  rates  of  discount  and  interest  are  usually  the  same. 


84       A  FIRST  BOOK  IN  BUSINESS  METHODS 


57.  Interest  and  Date  of  Maturity.  If  a  note  were  given 
February  4th,  payable  in  thirty  days,  it  would  be  necessary, 
in  order  to  find  the  date  of  maturity,  to  count  thirty  days 
from  February  4th,  which  would  make  the  date  of  maturity 
March  6th,  or  if  three  days  of  grace  were  allowed,  March  gth  ; 
but  if  a  note  were  given  February  4th,  payable  one  month 
from  date,  it  would  be  due  March  4th,  or  March  7th  if  three 
days  of  grace  were  added. 


Form  LXX. 


.^J 


A  so-day  Note  Payable  to  the  Bank 

If  a  note  reads  "with  interest"  and  no  rate  is  specified,  it 
draws,  from  the  date  of  the  note,  the  legal  rate  of  interest  in 
the  state  where  it  is  made. 

Notes  payable  on  demand  draw  no  interest  until  after  they 
have  been  presented  for  payment  unless  it  is  stated  in  the 
notes  that  they  are  to  draw  interest.  After  they  have  been 
presented  for  payment  they  draw  the  legal  rate.  What  is  the 
legal  rate  in  your  state?  (See  table,  §62.) 

From  the  fact  that  notes  are  usually  due  a  certain  number 
of  days  after  date,  great  care  should  be  taken  to  see  that  the 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS     85 


date  is  indicated  plainly  on  the  face  of  the  note.  This  is  so 
important  that  many  persons  place  the  date  of  maturity  as 
well  as  the  date  of  issue  on  the  face,  as,  for  example,  "  I  prom- 
ise to  pay  June  i,  1901."  It  is  very  important  to  remember 
that  when  a  note  is  given  payable  a  certain  number  of  days 
after  date,  the  actual  number  of  days  must  be  counted ;  but  if 
it  is  payable  a  certain  number  of  months  after  date,  the  calen- 
dar months  are  counted. 

Example:  Stephen  J.  Cramer  gave  a  note  to  J.  J.  Boardman 
on  February  7,  1901,  payable  one  month  after  date.  The  note  was 
due  March  7,  1901.  If  he  had  made  it  payable  thirty  days  after 
date,  it  would  have  been  due  March  9,  1901. 

If  no 'time  of  payment  is  specified  in  a  note — simply  a 
promise  to  pay — the  note  is  due  at  once,  or  on  presentation 
to  the  maker. 

58.  Place  of  Payment.  Some  place  of  payment  is  usually 
indicated  on  the  face  of  a  note.  If  no  place  of  payment  is 
indicated,  the  place  of  business  of  the  maker,  if  he  has  an 
office,  or  if  he  has  no  regular  place  of  business,  his  residence 
address,  is  the  proper  place  of  presentation. 

If  a  place  of  payment  is  indicated,  the  note  must  be  pre- 
sented there,  and  it  should  be  presented  for  payment  on  the 
very  day  of  maturity  in  states  in  which  no  days  of  grace  are 
allowed ;  and  in  those  which  do  recognize  grace,  at  the  expi- 
ration of  grace.  It  is  customary,  also,  to  send  to  the  maker 
notice  of  the  maturity  of  a  note,  several  days  before  it  is  due. 

Sometimes  the  making  of  any  demand  or  the  giving  of  any 
notice  is  waived  by  the  maker  and  indorsers,  by  making  the 
words  "  waiving  demand  and  notice  "  a  part  of  the  note  or  of 
the  indorsement. 


86        A  FIRST  BOOK  IN  BUSINESS  METHODS 


The  ordinary  form  of  notice  used  by  a  bank  is  shown  in 
Form  LXXI. 

Form  LXXI, 


J.  R.  CHAPMAN,  Cashier. 


CHCGtt  PRESENTED  III  PAYHENT  MUST  BE  CERTIFIED. 

Office  Hours,  10  to  3;  Saturdays,  9  to  12. 


A  Bank  Notice  for  Note  Due 

59.  Protest  and  Notice.  When  presentment  of  a  note  is 
made  to  the  maker  and  he  refuses  to  pay,  it  is  customary  to 
have  the  note  "protested." 

A  protest  is  a  statement  made  by  a  notary  public  certifying 
that  the  note  has  been  presented  for  payment  and  the  pay- 
ment refused,  and  thereupon  he  protests  against  the  maker, 
and  indorsers  if  there  are  any,  for  damages  and  costs. 

The  object  in  protesting  a  note  is  to  fix  the  liability  of  the 
indorsers  and  to  afford  good  evidence  of  the  fact  of  its  having 
been  dishonored, — in  other  words,  that  the  note  has  been  pre- 
sented and  payment  has  been  refused,—  and  of  giving  notice 
thereupon. 

The  maker  is  said  to  have  dishonored  the  note  when  he 
refuses  to  pay  the  note  at  its  maturity.  This  notice  of  dis- 
honor should  be  sent  to  the  indorser,  or  if  there  is  more  than 
one,  to  each  of  them,  within  twenty-four  hours  after  such 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      87 


CESTTFICATE  OF  PROTEST. 


Form  LXXII. 

Form  No.  TL  MaM  l|»  lit  CMcai.)  L«g»l  N.wi 


23e  it  "Known,  THAT  on  aw.-.- /./....?&. da, 

x  thousand  nine  hundred 0-**-*^L.../. 

Notary  Public,  duly  commissi.ned  a»*nj>rn.  i 


Whereupon  I,  the  said  Notary,  at  the  request  of  the  aforesaid,  did  PROTEST,  and,  by  these  Presents,  do  Solemnly  Protest, 

thereof,  as  all  others  whom  it  may  or  doth  concern,  for  exchange,  re-exchange,  and  all  COSTS,  charge*,  damage*,  and  interest  already 
incurred   by  reason  of  the    MU-^fctf4&3b*£**ldk ..of  the  said <&*?*?&& 


And  I.  the  said  Notary,  do  hereby  certint.  that,  on  the  same  day  and  year  above  y*Jy,  and  within  forty-eigh!  hours  from  the  time  of 
such  protest,  dne  notictof  tbe^foregoing  Protjst^ras  pnt-in  the  Post  office, 
No,i«    for_(^ 


for 


Each  of  the  above-named  places  being  th«  reputed  place  of  residence  of  the  person  to  whom  this  Notice  was  directed. 

In  Testimony  Whtreof,  I  have  hereunto  set  my  hand  and  affixed  my  Official  Sea],  th* 
da;  and  year  first  above  written. 


FEESi-Noting  for  Protest it,  cenrs;    Protest 75  cents;    Noting  Protest 15  «•><»!    Noli. 

Certificate  and  Seal 25  cenls;    Postage- 4 (    Vol-7..^.« ;  Page_fc^.Z.._ •    t~~ 


A  Certificate  of  Protest 


88        A  FIRST  BOOK  IN  BUSINESS  METHODS 


dishonor.  The  notice  of  dishonor  should  be  served  on  the 
indorser  personally,  if  possible,  and  if  not  possible,  it  should 
be  sent  through  the  mails  so  as  to  reach  him  the  next  busi- 
ness day  if  he  lives  in  the  same  city  with  the  maker.  If 
the  indorser  or  indorsers  do  not  live  in  the  city  in  which 
the  maker  resides,  the  notice  or  notices  should  bear  the  post- 
mark date  of  not  later  than  twenty-four  hours  after  dishonor. 
Notice  may  be  served  either  by  the  holder  of  a  note  or  by  his 
notary.  The  notice  should  be  in  writing. 

The  following  would  be  a  good  form  of  notice : 

Form  LXXIII. 
MR.  JAMES  P.  SMITH, 

SIR  : — A  certain  note  now  in  my  possession,  drawn  by  Charles 
Wood  in  your  favor,  for  the  sum  of  Eight  Hundred  Dollars,  pay- 
able in  three  months  from  the  8th  of  March  last,  and  by  you 
indorsed  to  me,  was  duly  presented  by  me  to  Charles  Wood  this 
day  and  payment  refused. 

Please  take  notice  that  I  look  to  you  for  payment  of  the  same. 

Yours  truly, 

LAFAYETTE,  IND.,  June  n,  1901.  G.  W.  HOWE. 

The  following  form  is  in  common  use  when  the  notice  is 
served  by  a  notary  public : 

Form  LXXIV. 

LAFAYETTE,  IND.,  June  n,  1901. 
MR.  JAMES  P.  SMITH, 

Take  notice  that  the  note  for  $800  made  by  Charles  Wood, 
dated  March  8,  1901,  payable  three  months  after  date  at  Lafayette, 
Ind.,  and  indorsed  by  you,  has  this  day  been  presented  to  him 
and  demand  made  for  payment  thereof,  which  has  been  refused. 
Said  note  has  been  duly  protested  for  non-payment,  and  the 
holder  now  looks  to  you  for  payment  of  the  same. 

W.  D.  ALLEN, 

Notary  Public. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      89 


60.  Accommodation  Notes.  Sometimes  a  note  is  given 
simply  as  an  accommodation  to  the  person  in  whose  favor  the 
note  is  drawn.  The  maker  of  the  note  does  not  expect  to  pay 
it,  and  the  payee  does  not  intend  that  it  shall  be  paid  by  the 
maker.  It  is  made  for  the  accommodation  of  the  payee,  so 
that  he  may  transfer  it  to  some  other  party  by  indorsement 
and  secure  money  on  it.  Nothing  of  value  has  been  given 
for  the  note,  and  the  maker  cannot  be  compelled  to  pay  it 
to  the  payee.  But  should  a  third  party  obtain  the  note  by 
indorsement,  then  the  maker  would  have  to  pay  it  at  maturity, 
if  the  payee  refuses  to  do  so. 

Example :  Suppose  Mr.  Henry  Cole,  who  has  but  small  means, 
wishes  to  use  some  money,  say  $500,  and  his  note  will  not  be 
accepted  at  the  bank.  He  goes  to  his  friend,  Mr.  W.  J.  Burdick, 
whose  note  will  be  good  at  any  bank,  and  asks  Mr.  Burdick  to 
give  him  an  accommodation  note.  Mr.  Burdick  writes  a  note 
payable  to  Mr.  Cole,  and  the  note  is  drawn  just  like  any  other 
promissory  note. 

When  Mr.  Burdick  has  signed  this  note,  Mr.  Cole  may  take  it 
to  the  bank  and  get  the  money  on  it.  At  the  end  of  the  sixty 
days,  when  the  note  is  due,  Mr.  Cole  is  expected  to  protect  it ;  i.  e., 
pay  it,  and  return  it  to  his  friend,  Mr.  Burdick.  By  this  means 
Mr.  Cole  has  had  the  use  of  the  money,  and  Mr.  Burdick  has  been 
at  no  expense  whatever.  He  has,  of  course,  run  some  risk,  which 
he  did  simply  to  accommodate  his  friend.  This  note  could  not  be 
collected  from  Mr.  Burdick  by  Mr.  Cole,  because  there  was  no 
"value  received'1  by  Mr.  Burdick.  -If,  however,  the  note  had 
been  bought  by  some  person  who  was  an  innocent  holder •,  i.  e.,  one 
who  bought  it  in  good  faith,  believing  it  to  be  good,  Mr,  Burdick 
would  have  had  to  pay  it  if  Mr.  Cole  failed  to  do  so. 

If  Mr.  Cole  had  wished  to  do  so,  he  could  have  drawn  a  note 
payable  to  the  order  of  the  bank  and  had  Mr.  Burdick  sign  the 
note  with  him.  Again,  Mr.  Cole  might  have  drawn  a  draft  on  Mr. 


90       A  FIRST  BOOK  IN  BUSINESS  METHODS 


Burdick  for  $500,  and  if  Mr.  Burdick  had  accepted  the  draft,  he 
could  have  had  it  discounted  at  the  bank  just  as  well  as  if  it  had 
been  a  note. 

In  any  of  these  cases  Mr.  Burdick  would  be  termed  an  accom- 
modation party,  for  an  accommodation  party  to  a  note  or  bill  is 
one  who  has  signed  as  drawer,  maker,  indorser,  or  acceptor,  with- 
out receiving  value,  and  for  the  purpose  of  lending  his  name  to 
some  other  person  as  a  means  of  credit. 

61.  Lost  Notes.  If  a  note  has  been  lost  or  stolen,  it  does 
not  release  the  maker  from  responsibility.  He  must  pay  it 
at  the  time  of  maturity  the  same  as  if  the  note  had  not  been 
lost.  A  person  who  buys  a  lost  or  stolen  note,  before  matur- 
ity, has  a  right  to  collect  the  value  of  the  note  from  its  maker, 
provided  he  has  no  notice  of  the  loss  and  the  note  is  payable 
to  bearer. 

Form  LXXV. 

BOND  OF  INDEMNITY  ON  PAYING  LOST  NOTE 

KNOW  ALL  MEN,  etc.  (as  in  common  bond).  Whereas,  the  said  -  , 
on  the  -  day  of  -  ,  18  —  ,  did  make,  execute,  and  deliver  unto  the 
above  bounden  -  ,  for  a  valuable  consideration,  his  promissory  note,  for 
the  sum  of  -  dollars,  written,  due  and  payable  on  or  before  the  -  day 
of  -  ,  then  next,  with  interest,  which  said  promissory  note  the  said  -  , 
since  the  delivery  of  the  same  to  him  as  aforesaid,  has  in  some  manner,  to  him 
unknown,  lost  out  of  his  possession  ;  and  whereas,  the  said  -  hath  this 
day  paid  unto  the  said  -  the  sum  of  -  dollars,  the  receipt  whereof  the 
doth  hereby  acknowledge,  in  full  satisfaction  and  discharge  of  the 


said  note,  upon  the  promise  of  the  said  -  to  indemnify  and  save  harmless 
the  said  -  in  the  premises,  and  to  deliver  up  the  said  note,  when  found, 
to  the  said  -  ,  to  be  canceled.  Now,  therefore,  the  condition  of  this  obli- 
gation is  such,  that  if  the  above  bounden  -  ,  his  heirs,  executors,  or  admin- 
istrators, or  any  of  them,  do  and  shall,  at  all  times  hereafter,  save  and  keep 
harmless  the  said  -  ,  his  heirs,  executors,  and  administrators,  of,  from,  and 
against  the  promissory  note  aforesaid,  and  of  and  from  all  costs,  damages,  and 
expenses  that  shall  or  may  arise  therefrom  ;  and  also  deliver,  or  cause  to  be 
delivered,  up  the  said  note,  when  found,  to  be  canceled,  then  this  obligation  to 
be  void,  else  to  remain  in  full  force  and  virtue. 
Sealed,  etc.  (as  in  common  bond.  See  §  116). 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS     91 


If  the  maker  of  a  note  which  has  been  lost  or  stolen  pays 
the  amount  to  the  original  payee,  he  should  receive  from  the 
payee  a  bond  of  indemnity  (see  Form  LXXV.)  to  secure  him 
against  a  second  payment. 

This  indemnity  bond  is  held  by  the  maker  of  the  note  as 
a  protection  in  case  the  original  note  should  be  found  and 
presented  to  him  for  payment. 

62.  Outlawed  Notes.  If  no  part  of  a  note  or  interest  on  it 
be  paid  within  a  specified  time,  fixed  by  law,  it  is  said  to  be 
outlawed,  and  cannot  be  collected. 

The  time  in  which  a  note,  account,  or  judgment  will  outlaw 
varies  in  the  different  states.  (See  table  below,  which  shows 
also  what  the  legal  rate  of  interest  is  in  the  various  states.) 

INTEREST  AND  STATUTE  OF  LIMITATIONS 


STATES. 

INTEREST. 

LIMITATIONS. 

STATES. 

INTEREST. 

LIMITATIONS. 

Legal  rate. 

1 

Judgments. 

, 

j 

} 

1 

Judgments. 

, 

3 

Alabama  
Arizona  

P.ct. 

8 
G 

P.ct. 

8 
10 
Any 
Any 
Anv 

7 

10 

8 
12 
7 
8 
8 
10 
6 
8 
Any 
6 
Any 

10 
10 
8 
Any 

Yrs. 

20 
10 
5 
5 
20 
t 
20 
U 
20 
7 
6 
20 
20 
20 

& 

10 
20 
12 
20 
6-10 
10 
7 
10 
10 

y.7- 

5 
5 
4 
6 

3 
5 
« 
5 
10 
10 
10 
5 
15 
5 

tte 

3 
6 
6 
6 
6 
10 
8 

rr». 

3 
3 
2 

5 
3 

115 
3 
« 
3 
6 
6 
6 
3 
5 
5 

Nebraska  
Nevada  
New  Hampshire  

P.ct. 

7 
6 

6 
6 
6 
6 
8 

P.ct. 

10 
A.y 

,1 

HJ 

12 
8 
10 
10 
6 

A7 

12 
6 
10 
12 
6 
6 
12 
6 
10 
12 

Trs. 

5 

6 
20 
20 
7 
20 
10 
10 
5 
1-5 
10 
20 
20 
20 
10-20 
10 
10 
8 
8 
10-20 
6 
10 
20 
5 

Yrs. 

5 
6 
6 
6 
6 
6 
"3 
6 
15 
5 
6 
6 
6 
6 
6 
6 
4 
6 
8« 
6-10 
6 
10 
6 
6 

Yrs. 

4 

4 
6 
6 
4 
6 
3 
6 
6 
3 
6 

6 
6 
6 
G 
2 
4 
6 
2-3 
3 
5 
6 
8 

California  
Colorado  
Connecticut  
Delaware  .  
District  of  Columbia. 
Florida  

New  Mexico  
New  York  
North  Carolina  
North  Dakota  
Ohio  
Oklahoma  
Oregon  
Pennsylvania  
Rhode  Island  
South  Carolina  
South  Dakota  
Tennessee.  

Georgia  
Idaho  
Illinois  
Indiana  
Iowa  

Kansas  
Kentucky    
Louisiana  

Maine  

Utah  
Vermont  
Virginia  
Washington  
West  Virginia  
Wisconsin  

Massachusetts  
Michigan  
Minnesota  
Mississippi  
Missouri  
Montana  

*  Under  seal.  10.  t  No  law.  t  Negotiable  notes,  6;  non-negotiable,  17.  §  Building  and  Loan  Associa- 
tions may  charge  12  per  cent  interest  and  premium  together.  1  Actions  on  merchants'  accounts  must  be 
commenced  in  two  years,  tt  Under  seal,  20.  §§  Any  rate  legal  on  call  loans  $5,000  or  upwards  on  collateral 
security,  it  Under  seal,  8. 


92        A  FIRST  BOOK  IN  BUSINESS  METHODS 


63.  Payment  Before  Due.    If  the  maker  of  a  note  wishes 
to  have  the  note  drawn  so  that  he  may  pay  it  at  any  time  and 
thus  stop  the  interest,  he  writes  it  so  that  it  will  read  "  On  or 
before,"  etc.,  "  I  promise  to  pay,"  etc. 

Example:  Suppose  Mr.  John  Crose  borrows  $500  of  W.  B. 
Cooley  for  one  year  at  8  per  cent  interest,  on  the  i4th  day  of 
November,  1900.  Mr.  Crose  does  not  wish  to  obligate  himself 
to  pay  the  note  before  the  i4th  day  of  November,  1901,  but  his 
circumstances  may  be  such  that  he  can  pay  the  money  within 
three  or  four  months,  so  he  has  the  note  written  as  follows : 

Form  LXXVI. 

$500.00.  MONTGOMERY,  ALA.,  November  14.,  /poo. 

For  value  received,  on  or  before  the  i^th  day  of  November,  1901, 
I  promise  to  pay  W.  B,  Cooley  or  ordery  Five  Hundred  Dollars,  with 
interest  from  date  at  8 per  cent*  JOHN  CROSE. 

64.  Partial  Payments.    Sometimes  the  drawer  or  maker 
of  a  note  cannot  pay  the  whole  amount  when  the  note  becomes 
due,  but  is  obliged  to  make  small  payments.    These  are  called 
partial  payments. 

The  usual  form  of  an  indorsement  of  a  partial  payment  on 
the  back  of  a  note  is  as  follows : 

Form  LXXVII. 
Received  on  the  within  note,  January  10,  1902,  $50.00. 

It  has,  however,  become  quite  common  to  make  the  indorse- 
ment as  simple  as  possible,  and  many  times  the  indorsement 
is  written  as  in  Form  LXXVIII.  Payments  should  be  made 
as  often  as  possible,  to  reduce  principal  and  interest. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS     93 


If  the  amount  paid  is  more  than  enough  to  cover  the 
interest  due  on  the  note  at  the  time  the  payment  is  made, 
the  balance  is  applied  to  the  principal. 


A  Simple  Paid  Indorsement 

65.  United  States  Rule  for  Partial  Payments.  In  order 
to  find  out  how  much  is  still  due  on  a  note  after  one  or  more 
partial  payments  have  been  made,  the  United  States  Rule 
for  partial  payments  is  ordinarily  used.  The  rule  is  given 
below  and  should  be  carefully  studied. 

RULE. — Compute  the  interest  on  the  principal  from  the  date  of 
the  note  to  the  time  of  the  first  payment.  If  the  payment  equals  or 
exceeds  the  interest,  add  the  interest  to  the  principal  and  subtract 
the  payment.  If  the  payment  does  not  equal  or  exceed  the  interest, 
take  no  notice  of  it  until  oiher  payments  have  been  made  which  in 
all  equal  or  exceed  the  interest  due.  Subtract  the  sum  of  the  pay- 
ments from  the  amount  due  and  treat  the  remainder  as  a  new 
principal. 


94       A  FIRST  BOOK  IN  BUSINESS  METHODS 


66.  Table  of  Time  in  Days.  In  finding  the  interest  on 
a  note,  thirty  days  are  considered  as  one  month,  and  360  days 
as  one  year.  The  usual  method  for  rinding  the  time  a  note 
has  to  run  is  to  subtract  one  date  from  another.  When  the 
exact  number  of  days  is  desired,  the  following  table  will  be 
of  assistance  in  finding  the  number  of  days  between  any  two 
dates  in  the  year.  Tables  of  this  kind  are  frequently  used 
by  bankers  and  others  who  loan  money  for  short  periods  of 
time. 


Jan. 

Feb. 

March 

April 

May 

June 

July 

Aug. 

Sept. 

Oct. 

Nov. 

Dec. 

1 

32 

60 

91 

121 

152 

182 

213 

244 

274 

305 

335 

2 

33 

61 

92 

122 

153 

183 

214 

245 

275 

306 

336 

3 

34 

62 

93 

123 

154 

184 

215 

246 

276 

307 

337 

35 

63 

94 

124 

155 

185 

216 

247 

277 

308 

338 

5 

36 

64 

95 

125 

156 

186 

217 

248 

278 

309 

339 

6 

37 

65 

96 

126 

157 

187 

218 

249 

279 

310 

340 

7 

38 

66 

97 

127 

158 

188 

219 

250 

280 

311 

341 

8 

39 

67 

98 

128 

159 

189 

220 

251 

281 

312 

342 

9 

40 

68 

99 

129 

160 

190 

221 

252 

282 

313 

343 

10 

41 

69 

100 

130 

161 

191 

222 

253 

283 

314 

344 

II 

42 

70 

101 

131 

162 

192 

223 

254 

284 

315 

345 

12 

43 

71 

102 

132 

163 

193 

224 

255 

285 

316 

346 

13 

44 

72 

103 

133 

164 

194 

225 

256 

286 

317 

347 

14 

45 

73 

104 

134 

165 

195 

226 

257 

287 

318 

348 

15 

46 

74 

105 

135 

166 

196 

227 

258 

288 

319 

349 

16 

47 

75 

106 

136 

167 

197 

228 

259 

289 

320 

350 

17 

48 

76 

107 

137 

168 

198 

229 

260 

290 

321 

351 

18 

49 

77 

108 

138 

169 

199 

230 

261 

291 

322 

352 

19 

50 

78 

109 

139 

170 

200 

231 

262 

292 

323 

353 

20 

51 

79 

110 

140 

171 

201 

232 

263 

293 

324 

354 

21 

52 

80 

111 

141 

172 

202 

233 

264 

294 

325 

355 

22 

53 

81 

112 

142 

173 

203 

234 

265 

295 

326 

356 

23 

54 

82 

113 

143 

174 

204 

235 

266 

296 

327 

357 

24 

55 

83 

114 

144 

175 

205 

236 

267 

297 

328 

358 

25 

56 

84 

115 

145 

176 

206 

237 

268 

298 

329 

359 

26 

57 

85 

116 

146 

177 

207 

238 

269 

299 

330 

360 

27 

58 

86 

117 

147 

178 

208 

239 

270 

300 

331 

361 

28 

59 

87 

118 

148 

179 

209 

240 

271 

301 

332 

362 

29 

88 

119 

149 

180 

210 

241 

272 

302 

333 

363 

30 

89 

120 

150 

181 

211 

242 

273 

303 

334 

364 

31 

90 

151 

212 

243 

304 

365 

NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      95 


Example :  Suppose  we  wish  to  find  the  number  of  days  from 
March  i4th  to  September  3d  of  the  same  year.  March  i4th  is  num- 
bered 73  and  September  3d  is  numbered  246.  Subtract  73  from 
246  and  we  will  have  the  exact  number  of  days  intervening,  or  173 
days.  If  February  2pth  occurs  in  the  time,  add  an  additional  day. 
The  day  a  note  is  made  is  not  included  in  its  time  to  run.  If  the 
note  were  dated  April  8th,  to  run  60  days,  and  were  given  in  a  state 
which  recognizes  days  of  grace,  we  would  add  the  three  days  of 
grace,  making  63  days.  Now  April  8th  is  numbered  98;  adding  63 
days  equals  161,  which  is  June  loth,  or  the  time  when  the  note 
falls  due. 

67.  Merchants'  Rule  for  Computing  Interest.     The  Com- 
mercial  or  Merchants'  Rule  is  frequently  used  in  finding  the 
amount  due  on  notes  and  accounts.     The  rule  is  as  follows : 

RULE. —  Find  the  amount  of  the  principal  from  the  time  it 
begins  to  draw  interest  to  the  day  of  settlement.  Find  also  the 
interest  on  each  payment  from  the  time  it  was  made  to  the  date  of 
settlement  and  subtract  the  sum  of  the  payments  and  the  interest  on 
the  same  from  the  amount  of  the  principal.  The  remainder  will  be 
the  sum  due  at  the  time  of  settlement. 

68.  Usury.    When  a  higher  rate  of  interest  is  charged  for 
the  use  of  money  than  the  law  allows,  it  is  called  usury,  and 
it  cannot  be  collected  legally.     Usury  laws  were  passed  to 
protect  the  borrower  from  having  hard  and  impossible  condi- 
tions imposed  upon  him  by  the  lender. 

Sometimes  a  person  is  placed  in  such  a  position  that  he 
must  have  money,  and  this  absolute  necessity  to  borrow 
money  would  enable  those  who  have  money  to  lend,  to 
charge  an  excessive  rate  of  interest  for  the  money  they  loan. 
In  some  instances  50  per  cent  or  as  high  as  100  per  cent  has 
been  charged  the  borrower.  The  usury  laws  were  framed  to 


96        A  FIRST  BOOK  IN  BUSINESS  METHODS 


prevent  these  exorbitant  charges.  They  have  not  proved  so 
satisfactory  as  was  anticipated,  nor  have  they  wholly  accom- 
plished the  object  for  which  they  were  enacted,  so  that  now 
the  laws  regarding  usury  are  much  changed  from  what  they 
formerly  were,  and  in  some  of  the  states  there  are  no  usury 
laws  whatever.  Parties  may  charge  any  rate  of  interest  that 
is  agreed  upon. 

In  many  of  the  states  where  there  are  usury  laws  in  force 
any  charge  above  the  legal  rates  simply  forfeits  the  excess. 
This  is  the  law  in  Michigan,  Indiana,  Minnesota,  Ohio/ Penn- 
sylvania, and  several  other  states.  In  some  of  the  states, 
however,  to  charge  usury  forfeits  all  interest  and  a  part  of 
the  principal,  while  in  others,  as  in  Illinois,  the  interest  is 
forfeited  and  a  fine  imposed  for  the  usury.  What  is  the  law 
regarding  usury  in  your  state  ? 

69.  "  Ironclad "  or  Judgment  Notes.  In  some  parts  of 
the  United  States  an  additional  clause  is  sometimes  inserted 
in  a  promissory  note,  providing  that  in  case  it  becomes  neces- 
sary to  resort  to  an  action  at  law  to  enforce  payment,  the 

Form  LXXIX. 


n 

\J... 


•/^.., 


™.  ««^/ W«<<W 

at.&.jt,^    cent  Jfci    annu-n,    *fte4.    <3&g*t4be*<!SS***^...^~^ 

"'"it  any  time  htriuft". 
;ellier  witli  creits,  and  _ 

,o  b>  Tinue  liercofT  ' 

.....^I^L.__ 


«£LE^s^<. 


A  Judgment  Note 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      97 


maker  of  the  note  will  pay  an  additional  amount  to  cover 
attorney's  fees  and  expense  of  collecting. 

Some  of  the  states  have  a  form  of  note  called  a  judgment 
note.  This  form  of  note  contains  a  "  power  to  confess  judg- 
ment" in  case  the  note  is  not  paid  at  maturity.  A  power 
to  confess  judgment  authorizes  the  court  to  take  immediate 
possession  of  as  much  of  the  maker's  property  as  will  cover 

Form  LXXX. 


A  common  form  of  Promissory  Note 

the  amount  of  the  note  and  costs.  It  is  necessary  to  give 
a  notice  of  such  action  to  the  maker  of  the  note.  This  judg- 
ment could  be  secured  from  any  court  of  record.  When  a 
note  contains  a  clause  of  this  description  it  is  frequently 
called  an  ironclad  note.  One  should  be  extremely  careful 
about  giving  such  a  note,  and,  in  fact,  it  never  should  be  given 
if  it  can  be  avoided. 

In  some  of  the  states  a  note  of  this  description  would  be 
considered  illegal  on  the  ground  that  it  may  afford  cover  for 
usury,  and  the  payee  of  a  note  should  be  careful  to  ascertain 
what  the  law  is  in  the  state  where  he  is  doing  business  before 
inserting  a  clause  of  this  kind  in  a  promissory  note. 


98        A  FIRST  BOOK  IN  BUSINESS  METHODS 


70.  Joint   Notes.    When  two  persons  give  a  note  they 
make  it  in  either  of  two  ways.     They  may  write  it,  "we 
jointly  and  severally  promise  to  pay,"  or,  "  we  promise  to  pay," 
and  both  sign  their  names.     In  the  former  case  the  note  is 
called  a  joint  and  several  note,  and  in  the  latter  a  joint  note.     In 
case  any  question  arises  as  to  the  payment  of  the  above,  the 
makers  of  a  joint  and  several  note  may  be  sued  separately, 
and  in  a  joint  note  they  must  be  sued  jointly,  that  is,  together, 
but  in  some  states  this  distinction  is  abolished  by  law. 

Form  LXXXI. 

JOINT  NOTE 

$216.00  Sioux  FALLS,  S.  D.,  August  10, 1001. 

Sixty  days  from  date,  for  value  received,  we  promise  to  pay  E. 
VV.  Hazard,  or  order ;  Two  Hundred  and  Sixteen  Dollars,  with 
interest.  B.  J.  HENSHAW. 

C.  D.  SNOOK. 

Form  LXXXII. 

JOINT  AND  SEVERAL  NOTE 

$600.00  SOUTH  BEND,  IND.,  May  28,  1001. 

Thirty  days  after  date,  for  value  received,  we  jointly  and  sever- 
ally promise  to  pay  to  the  order  of  R.  L.  Peters,  Six  Hundred  Dollars, 
with  use.  ROBERT  BEARDSLEY. 

GEORGE  JOHNSON. 

71.  Collateral  Notes.    A  collateral  note  differs  somewhat 
from  an  ordinary  promissory  note,  and  is  used  when  the 
person  in  whose  favor  the  note  is  drawn  receives  and  holds 
as  security  for  the  payment  of  the  amount  named  in  the  note, 
certain  property  belonging  to  the  maker.    This  is  called  "  col- 
lateral security,"  and  if  the  maker  of  the  note  does  not  keep 
his  promise  faithfully  to  pay  the  note  when  due,  the  holder 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      99 


of  the  collateral  security  is  empowered  to  sell  trie  property, 
keeping  a  sufficient  amount  of  the  proceeds  to  cover  his  own 
claims,  and  restoring  the  remainder  to  the  maker  of  the  note. 


Form  LXXXIII. 


COLLATERAL  NOTE.  SHORT  FORM 


Primed  and  for  sale  by  M   D.  Riot.,  ! 


after  date  fot  value  received       ^          promise  to  pay  to  tne  order'of 


and  ^K   .  hereby  give  the  said  legal  holder    his   her  or  their  assign  or  assigns,  authority  to  sell  the  same,  or  any  part  thereof  on 
the  maturity  of  this  Note,  or  at  any  time  thereafter,  or  before,  in  the  e*ent  of  said  security  depreciating  in  value,  at  public  or  private 
sale,  without  advertising  the  same,  or  demanding  payment,  or  giving  obtfct^and  to^jpply  so  much  of  the  proceeds  thereof  to  t 
payment  of  this  Note,  as  may  be  necessary  to  pay  the  same,  with  all  tnt'erest  duo  lt*mS&.  and  ftfso  ft>%ie  payment  of  all  expens 


g  the.salc  of  the  said  collaterals,  and  i 


the  proceeds  of  the  sale*f 


penses 
lhe  Principal    Inter 

is  hereby 


.  , 

expenses  ^    promise  to  pay  the  deficiency  forthwith  after  such  sale*  wTtft  ti5ere*t  at*     ,£..per  ^n^tJ 

agreed  and  understood  thai  il  recourse  is  had  to  said  collateral,  any  money  realized  o\saTe  thet«ul  «o^e,\cess  of  the  amount  due  upon 
this  Note  shall  be  applicable  to  the  payment  of  any  other  note  or  cl»**«J[*h  thg  said  legal  HMf\*yzy  have  against^i^/  and 
in  eve  of  any  exchange  of  or  addition  to  the  collateral  above  o*ftfe2.  'the  (£$«?»»•  of.tnit'NcJe  shall  extend  to  such  neu  or 

* 


additional  collateral. 


-»«-v-.«w » »*iv^;' 

-•*•*.*• Vr.jj-  ••••.••»•; )  22. : 


Form  for  a  Collateral  Note 

A  collateral  note  is  used  in  many  cases  where  the  maker 
borrows  money  and  wishes  to  make  his  promise  of  payment 
as  secure  and  satisfactory  as  possible  without  asking  any  of 
his  friends  to  sign  the  note  with  him.  The  property  left  as 
a  pledge  is  described  in  the  body  of  the  note  itself.  Stocks, 
bonds,  and  negotiable  notes  are  often  used  for  this  purpose. 


ioo     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  LXXXIV. 

NOTE  PA  YABLE  BY  INSTALLMENTS 

$275.00  CLEVELAND,  O.,fune  n,  1001. 

For  value  received,  I  promise  to  pay  to  George  D.Johnson  or  order, 
the  sum  of  Two  Hundred  and  Seventy-five  Dollars,  with  interest 
from  date  at  6  per  cent  per  annum  as  follows  :  One  Hundred  Dollars 
on  or  before  May 5, 1002,  One  Hundred  Dollars  on  or  before  August 
/,  ioo2y  and  Seventy-five  Dollars  on  or  before  December  n,  1002. 

C.  D.  SMITH. 

Form  LXXXV. 

NOTE  PAYABLE  ON  OR  BEFORE  A  CERTAIN  DATE 

$5°-75  MILWAUKEE,  Wis.,  May  j,  1001. 

On  or  before  the  twelfth  day  of  January,  1002, 1  promise  to  pay 
to  G.  McDonald  or  order,  Fifty-six  and  TYo  Dollars,  with  interest 
from  date  at  j  per  cent.  Value  received. 

G.  P.  TRUESDALE. 

Form  LXXXVI. 

PRODUCE  NOTE 

$25.00  BUCHANAN,  MICH.,  September  5, 1001. 

For  value  received,  I  promise  to  pay  to  George  D.  Johnson,  on 
demand,  Twenty -five  Dollars  in  produce  at  my  feed  store. 

M.  W.  BROWN. 

NOTE. —  A  produce  note  is  one  payable  in  produce. 

72.  Special  Things  to  Remember  About  Notes.  The  sub- 
ject of  promissory  notes  is  a  very  extensive  one,  and  only  a 
few  of  the  many  important  things  pertaining  to  it  can  be 
mentioned  here.  The  following  are  of  special  interest  and 
should  be  carefully  noted : 

1.  A  note  made  on  Sunday  is  void  in  some  states. 

2.  A  note  made  under  duress  or  compulsion  is  void. 


NOTES,  INTEREST,  DISCOUNT, 'PAYMENTS     101 

3.  Notes  obtained  by  fraud,  or  made  by  a  person  when 
intoxicated,  usually  cannot  be  collected. 

4.  Notes  bear  interest  only  when  so  stated  in  the  note, 
except  after  maturity,  when  they  draw  the  legal  rate  of 
interest  in  the  state  where  they  are  issued. 

5.  The  holder  of  a  note  has  a  legal  claim  against  every 
person  who  has  indorsed  it,  and  each  indorser  is  responsible 
to  all  indorsers  who  follow  him. 

6.  A  note  may  be  written  on  any  paper,  with  pen  or  pen- 
cil, and  it  will  be  valid. 

7.  If  a  note  be  lost  or  stolen,  the  maker  is  not  necessarily 
released  from  payment. 

8.  If  no  time  of  payment  is  specified  in  a  note — simply  a 
promise  to  pay  —  the  note  is  due  at  once. 

9.  A  note  made  in  one  state  and  payable  in  another  must 
be  governed  by  the  laws  of  the  state  in  which  it  is  to  be  paid. 

10.  Notes  payable  on  demand  draw  no  interest  until  after 
they  have  been  presented  for  payment,  unless  it  is  stated  in 
the  note  that  they  are  to  draw  interest.     After  they  have  been 
presented  for  payment  they  draw  the  legal  rate  of  interest. 

11.  If  a  note  reads  "with  interest,"  but  no  rate  is  speci- 
fied, it  draws  the  legal  rate  of  interest  in  the  state  where  it 
was  given,  from  the  time  it  was  made. 

12.  If  a  note  falls  due  on  a  Sunday  or  on  a  legal  holiday,  it 
should  be  paid  the  day  before  unless  otherwise  provided  by  law. 

13.  Notes  payable  "on  demand"  are  not  entitled  to  days 
of  grace. 

14.  If  no  place  of  payment  is  mentioned  in  the  note,  it 
should  be  presented  to  the  maker  personally,  or  at  his  place 
of  business  during  business  hours. 

15.  The  misspelling  of  a  word  will  in  no  case  invalidate 
the  note. 


102      A 'FIRST 'BOOK  IN  BUSINESS  METHODS 


1 6.  If  a  note  is  given  by  a  person  who  cannot  write,  it 
is  important  to  have  a  witness  who  can  testify  to  the  genuine- 
ness of  his  mark. 

17.  The  promisors  of  a  joint  note  must  be  sued  jointly, 
while  either  promisor  of  a  joint  and  several  note  may  be  sued 
alone. 

1 8.  A  note  payable  on   demand  is  due  as  soon  as  the 
demand  is  made;  but  if  it  is  payable  "one  day  from  date," 
three  days  of  grace  are  allowed  for  payment  in  most  of  the 
states. 

19.  If  both  figures  and  words  are  used  in  a  note,  the  words 
take  precedence  in  a  case  of  doubt  or  disagreement. 

20.  The  figures  are  usually  placed  in  the  upper  left-hand 
corner  of  the  note,  and  the  words  in  the  body  of  the  instru- 
ment. 

21.  If  a  note  is  signed  by  a  firm,  it  may  be  collected  from 
either  of  the  partners. 

22.  If  a  note  is  given  on  the  8th  day  of  February,  payable 
one  month  after  date,  it  would  be  due  on  the  8th  day  of  March, 
but  if  the  note  is  given  on  the  8th  of  February  and  is  pay- 
able thirty  days  after  date,  the  exact  number  of  days  must  be 
counted  in  order  to  find  just  when  it  falls  due. 

23.  If  a  note  has  been  lost  or  stolen,  the  holder  must 
make  a  formal  demand  for  its  payment,  and  must  offer  an 
indemnity  bond  in  case  the  maker  pays. 

24.  If  a  payment  is  made  on  a  note  which  is  secured  by  a 
mortgage,  the  amount  of  the  payment  is  indorsed  on  the  back 
of  the  note,  not  on  the  mortgage". 

25.  A  note  given  by  a  minor  is  void  unless  it  is  given  for 
actual  necessities,  such  as  food  and  clothing.     If,  however,  the 
note  is  given  when  the  maker  is  under  age,  and  when  he  has 
become  of  legal  age  he  ratifies  the  note,  it  is  binding. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      103 


EXERCISES  ON  CHAPTER  IV. 

/.     What  is  a  promissory  note  ? 

2.    What  is  the  difference  between  a  note  and  a  check  ? 
j.     Is  a  note  signed  with  a  lead  pencil  good  at  law? 
Would  you  advise  signing  them  that  way  ?    Why  ? 

4.  If  no  time  of  payment  is  specified  in  a  note,  when  is  it 
due? 

5.  A  note  is  drawn  payable  one  month  after  date,  and  is 
dated  February  2,   1898;  when  is  it  due?    If  made  payable 
thirty  days  after  that  date,  when  would  it  be  due  ? 

6.  A  note  is  given  by  a  young  man  eighteen  years  of  age, 
who  has  property  of  his  own;   can  the  note  be  collected? 
Supposing  the  note  had  been  given  for  board  or  for  neces- 
saries of  life,  would  that  make  any  difference  about  collect- 
ing the  amount  of  the  note  ? 

7.  What  is  an  accommodation  note  ?     Describe  two  forms 
of  accommodation  notes,  and  tell  which,  in  your  judgment, 
would  be  the  better  form. 

8.  What  is  a  judgment  note  ?    Why  should  one  not  sign 
a  judgment  note  unless  absolutely  necessary? 

p.  Supposing  no  rate  of  interest  is  mentioned  in  a  note, 
does  it  draw  any  interest,  and  if  so  at  what  rate?  When 
would  it  commence  to  draw  interest  ? 

10.  If  the  holder  of  a  note  sells  it  to  a  third  person  and 
transfers  it  by  indorsement,  is  he  responsible  for  its  payment  ? 
How  can  he  indorse  it  so  as  not  to  hold  himself  responsible 
for  its  payment  ? 

IT.  If  a  man  sign  a  note  on  its  face  as  security,  is  he  one 
of  the  makers  of  the  note  or  is  he  an  indorser  ? 

12.  If  you  hold  a  note  against  P.  W.  Van  Arsdale  and  the 
note  is  destroyed  by  fire,  can  the  amount  of  the  note  be 


104      A  FIRST  BOOK  IN  BUSINESS  METHODS 

collected?  How  would  you  proceed  if  Mr.  Van  Arsdale 
refuses  to  pay  the  note  ? 

7j.  If  the  figures  in  the  left-hand  corner  of  a  note  showed 
the  principal  to  be  $120.25,  and  the  writing  in  the  body  of  the 
note  showed  one  hundred  thirty  and  45-100  dollars,  which 
would  be  considered  correct  ? 

7^.  You  sell  a  horse  to  H.  W.  Gilson  for  $125,  and  in 
payment  receive  his  note  due  in  six  months.  R.  W.  Powers 
signs  the  note  with  him  as  security.  Write  the  note  with 
signatures. 

75.  At  the  end  of  six  months  H.  W.  Gilson  pays  $100. 
Make  the  indorsement  on  the  note.  One  month  later  you  sell 
the  note  to  A.  C.  Howe  and  transfer  it  to  him  by  indorsement. 
Make  the  proper  indorsement.  How  could  you  make  the 
indorsement  so  as  not  to  hold  yourself  responsible  for  its 
payment? 

1 6.  Define  and  give  examples  on  paper  of  the  following: 
Indorsement  in  blank,  indorsement  in  full,  qualified  indorse- 
ment, and  restrictive  indorsement. 

77.    When  may  a  note  be  transferred  without  indorsement? 

18.  What  is  the  object  of  protesting  a  note  and  how  is  it 
done? 

7p.  How  many  years  will  it  take  to  outlaw  a  note  in  your 
state  if  no  part  of  the  principal  or  interest  is  paid  ? 

20.  Distinguish  between  a  joint  and  a  joint  and  several 
note. 

21.  Write  a  letter  to  Johnson,  Forbes  &  Co.  of  Little  Rock, 
Ark.,  informing  them  that  a  note  made  on  the  2oth  day  of  May 
last  by  F.  C.  Larkin  and  indorsed  over  to  you  by  Johnson, 
Forbes  &  Co.,  is  now  due,  and  that  presentation  has  been  made 
to  Mr.  Larkin,  who  dishonored  the  note.    Tell  Johnson,  Forbes 
&  Co.  that  therefore  you  look  to  them  for  payment. 


NOTES,  INTEREST,  DISCOUNT,  PAYMENTS      105 


GENERAL  REVIEW  EXERCISES 

/.  In  an  invoice  of  goods  sold,  what  is  the  first  double  col- 
umn to  the  right  of  the  invoice  used  for? 

2.    Which  is  the  extension  column  ? 

j.  What  other  things  are  noted  in  an  invoice  besides  the 
quantities  and  prices  of  the  goods? 

4.  What  is  meant  by  trade  discount  ? 

5.  Is  there  any  difference  between  a  trade  discount  and  a 
cash  discount  ? 

6.  You  receive  an  invoice  of  goods  from  Simpson  &  Brown, 
St.  Louis,  Mo.,  and  find  that  they  have   overcharged   you. 
Write  a  polite  letter  to  them,  calling  their  attention  to  the 
overcharge,  and  ask  them  for  a  corrected  invoice. 

7.  Of  what  use  are  banks  ? 

8.  What  is  the  difference  between  a  savings  bank  and  a 
bank  of  deposit  ? 

p.  Describe  the  method  of  opening  an  account  with  a 
bank  of  deposit. 

10.  Will  bankers  accept  deposits  of  money  from  anyone 
who  wishes  to  open  an  account  with  them  ? 

11.  When   a  depositor  places   money   in   a   commercial 
deposit  bank,  what  does  he  hold  as  a  receipt  to  show  the 
amount  of  his  deposit  ? 

12.  Can  money  which  is  deposited  in  a  savings  bank  be 
withdrawn  by  check  ? 

ij.  You  buy  of  T.  D.  Wood  &  Co.  a  bill  of  goods  amount- 
ing to  $245.35.  Write  a  check  in  payment,  making  it  payable 
to  their  order. 

14.  If  you  owe  William  Smith  $23.45  on  account  and  give 
him  a  check  in  payment,  would  it  be  necessary  for  him  to  give 
you  a  receipt  showing  that  the  account  has  been  paid  ? 


CHAPTER  V. 

DRAFTS 

73.  Uses  of  Drafts.  A  draft  is  a  written  order  or  request 
by  one  party  to  a  second  to  pay  to  a  third  a  certain  sum  of 
money  at  a  specified  time.  There  are  always  three  parties  to 
a  draft :  the  drawer,  the  drawee,  and  the  payee.  The  drawer  of 
a  draft  is  the  person  who  draws  it  or  signs  his  name  to  it. 
The  drawee  is  the  person  on  whom  the  draft  is  drawn,  or  the 
one  who  is  to  pay  the  draft.  The  payee  is  the  person  to  whom 
the  payment  is  to  be  made.  It  is  customary  in  writing  a 
draft  to  place  the  address  of  the  person  who  is  to  pay  the 
draft  in  the  lower  left-hand  corner. 

A  very  common  method  used  by  business  men  for  collect- 
ing accounts  is  by  draft. 

Example :  Let  us  suppose  that  Mr.  Charles  Green,  who  lives 
in  Muskegon,  Mich.,  owes  Mr.  George  D.  Johnson,  a  wholesale  mer- 
chant of  Chicago,  $45.50  for  a  bill  of  goods  purchased.  If  Mr. 
Green  does  not  send  the  remittance  for  the  amount  due  for  the 
goods  after  a  certain  time  which  is  usually  specified  in  the  invoice, 
Mr.  Johnson  would  probably  draw  a  draft  on  him  for  the  amount 
due.  The  draft  might  be  drawn  "on  demand"  or  "at  sight"  or 
any  number  of  days  after  sight  or  demand.  If  it  were  drawn  pay- 
able "  at  sight,"  it  would  be  drawn  like  Form  LXXXVII. 

When  Mr.  Johnson  has  drawn  the  draft,  he  will  take  it  to  some 

Cio6] 


DRAFTS 


107 


Form  LXXXVII. 


Commercial  bight  Drafts 


bank  in  Chicago,  the  First  National  Bank  in  this  instance,  and  it 
will  be  indorsed  over  to  some  bank  in  Muskegon  and  be  sent 
there  for  collection.  If  Mr.  Johnson  had  wished  to  do  so  he  could 
just  as  well  have  drawn  the  draft  payable  to  some  bank  in  Muske- 
gon, and  sent  it  direct  to  the  banker  there  for  collection  instead  of 
asking  the  banker  in  Chicago  to  attend  to  the  collection  for  him. 
If  Mr.  Green  had  happened  to  live  in  some  small  place  where 
there  was  no  bank,  Mr.  Johnson  could  have  sent  the  draft  to  the 
postmaster  or  some  other  responsible  person  for  collection.  When 
the  banker  in  Muskegon  receives  the  draft  to  be  collected,  he  sends 


io8      A  FIRST  BOOK  IN  BUSINESS  METHODS 


it  to  Mr.  Green  by  one  of  the  bank  clerks  whose  business  it  is  to  look 
after  collections.  As  it  is  a  sight  draft,  Mr.  Green  will  be  given 
three  days  of  grace  after  he  has  accepted  it,  but  he  would  not  be 
allowed  this  time  in  states  where  days  of  grace  have  been  abol- 
ished. If  he  is  willing  to  pay  the  draft,  he  writes  across  its  face, 
usually  in  red  ink,  "Accepted,"  and  the  date,  and  also  states  where 
he  will  pay  it,  and  signs  his  name  as  in  the  form  following: 

Form  LXXXVIII. 


Form  of  an  Accepted  Draft 

Mr.  Green  is  not  obliged  to  accept  the  draft  unless  he  ch'ooses 
to  do  so,  but  when  he  has  accepted  it  he  is  obliged  to  pay  it  when 
it  becomes  due,  just  as  he  would  be  obliged  to  pay  a  note. 

After  the  draft  has  been  accepted  the  clerk  takes  it  back  to  the 
bank  and  waits  until  the  expiration  of  the  time  when  the  accept- 
ance is  due.  He  then  leaves  it  at  the  place  designated  by  Mr. 
Green  for  payment,  and  when  the  draft  is  paid  the  proceeds  are 
remitted  to  Mr.  Johnson  by  bank  draft,  and  the  whole  cost  to  him 
will  not  be  more  than  20  or  25  cents. 

One  should  be  careful  not  to  draw  on  a  person  unless  he 
has  been  notified  of  the  intention.  Many  business  men  pre- 
fer to  be  notified  of  the  dates  their  accounts  become  due,  and 
to  make  arrangement  for  payment  by  other  means. 


DRAFTS  109 


74.  Indorsement  "for  Collection."    It  frequently  happens 
that  a  person  holding  a  bill  or  note  finds  it  necessary  to  send 
it  for  collection  to  some  place  where  there  is  no  bank,  and  if 
he  has  little  or  no  acquaintance  with  the  person  whom  he  asks 
to  make  the  collection  for  him,  he  should  indorse  and  add  the 
words,  "for  collection."     This  checks  the  further  transfer  of 
the  paper,  because  any  one  to  whom  it  may  be  offered  can  see 
that  it  was  the  business  of  the  person  presenting  it  to  him  to 
collect  it  on  the  indorser's  account.  It  is  not  customary,  how- 
ever, to  do  this  where  collections  are  made  through  banks,  and 
some  banks  refuse  to  accept  drafts  indorsed  "  for  collection." 

75.  Dishonoring  a  Draft.    Thousands  of  drafts  are  col- 
lected by  banks  every  day.     Some  business  men  do  not  send 
a  remittance  for  goods  purchased,  preferring  to  wait  until  a 
draft  is  drawn  upon  them  for  the  amount  due.     Some  people 
are  more  likely  to  pay  drafts  drawn  upon  them  for  amounts  due 
than  they  are  to  send  a  remittance  for  the  amount  if  a  state- 
ment of  account  is  sent  them.     A  business  man  is  not  obliged 
to  accept  a  draft  when  presented,  even  if  the  account  for  which 
the  draft  is  drawn  is  past  due;  but  if  he  refuses  to  accept  the 
draft,  he  should  give  some  reason  for  refusing,  so  that  a  brief 
explanation  may  be  made  on  the  back  of  the  draft  before  it 
is  returned  to  the  drawer.     Business  men  often  borrow  money 
of  banks,  and  should  they  habitually  refuse  to  honor  drafts  on 
them  the  banks  would  soon  refuse  to  extend  them  credit. 

A  person  who  refuses  to  pay  or  to  accept  a  draft  that  is 
drawn  upon  him  is  said  to  have  dishonored  it.  Many  business 
men  draw  on  their  customers  and  then  discount  these  drafts 
at  their  bank.  Some  of  the  drafts  are  dishonored  when  pre- 
sented to  the  drawee,  but  the  drawer  is,  of  course,  responsible 
for  the  payment  of  any  drafts  which  he  has  discounted  at  his 


no     A  FIRST  BOOK  IN  BUSINESS  METHODS 


bank,  and  he  must  make  good  the  shortage  caused  by  any  drafts 
which  are  dishonored. 

76.  Protest  of  Drafts.     Drafts  which  are  not  accepted  or 
paid  when  due  are  usually  protested  in  the  same  manner  that 
notes  are  protested,  but  not  for  the  same  reason.     Notes,  you 
will  remember,  are  protested  in  order  to  hold  the  indorsers 
liable  (see  §59).     Drafts  are  protested  usually  to  serve  as  a 
notice  to  the  drawer  of  non-payment  or  non-acceptance,  or,  if 
the  drafts  have  been  discounted,  to  hold  the  drawer  or  maker 
liable.     Drafts  may  be  transferred  by  indorsement  the  same 
as  notes  and  checks,  and  the  same  rules  as  to  indorsement 
apply. 

77.  Bank  Drafts.    Nearly  all  banks  keep  money  on  deposit 
to  their  credit  with  some  metropolitan  bank  or  some  bank  in 
a  commercial  center.    As  New  York  is  the  commercial  center 
of  the  United  States,  most  large  banks  keep  a  deposit  in  some 
New  York  bank.     Usually  they  have  money  on  deposit  in  one 
or  two  cities  in  the  West  and  one  or  two  cities  in  the  East. 

Example:  Let  us  suppose  that  Mr.  George  L.  Peters  of 
Madison,  Wis.,  owes  Scott,  Jackson  &  Co.  of  New  York  $35.75, 
and  wishes  to  pay  his  bill.  He  does  not  care  to  send  them  the 
money,  for  there  would  be  considerable  expense  connected  with 
paying  the  bill  in  that  way.  The  express  companies  would  charge 
him  for  carrying  the  money,  and  if  he  should  send  it  through  the 
post  office  there  would  be  some  delay.  He  would  much  prefer, 
and  it  would  be  much  safer,  cheaper,  and  more  convenient,  for 
him  to  go  to  his  banker  and  buy  a  draft  on  a  New  York  bank  for 
the  amount  he  owes,  and  send  it  to  Scott,  Jackson  &  Co.  The 
bank  in  Madison,  Wis.,  would  charge  Mr.  Peters  a  little  more 
than  the  amount  of  the  draft,  $35.75— enough  more  to  pay  them 
for  the  trouble  of  drawing  the  draft. 


DRAFTS 


in 


The  draft  which  Mr.  Peters  would  receive  from  the  bank  in 
Madison  would  be  something  like  the  first  form  given  below. 

Form  LXXXIX. 


No.  659. 

Madison,  Wis  ,  Nov.  2nd,  1901. 
FIRST  NATIONAL  BANK  OF  MADISON. 

Pay  xo  the  order  of  Scott,  Jackson  &  Co  , $35. 75 

Thirty  five  and  75/100   Dollars 


To  FIRST  NATIONAL  BANK 
New  JTorX 


&  Cashier. 


MATTEVSON,  WttSOtt  .&  CO. 


BAIVKERS. 

" 


DUPLICATE  UNPAI  o 


»o   FIRST  NATIONAL  BANK. 
CHICAGO.  ILL. 


Forms  of  Bank  Draft 

If  Mr.  Peters  had  wished  to  do  so  he  could  have  had  the  draft 
drawn  payable  to  himself  and  then  indorsed  it  over  to  Scott,  Jack- 
son &  Co.  of  New  York,  by  writing  across  the  back  of  the  draft, 
"  Pay  to  the  order  of  Scott,  Jackson  &  Co.,"  and  signing  his  name. 
As  all  drafts  are  finally  returned  to  the  banks  where  they 
were  issued,  they  may  be  used  if  necessary  to  prove  that  pay- 
ment has  been  made. 


H2      A  FIRST  BOOK  IN  BUSINESS  METHODS 


78.  Uses  of  Bank  Drafts.  Business  men  use  bank  drafts 
more  than  any  other  method  for  sending  money  remittances 
from  one  part  of  the  country  to  another.  There  are,  however, 
several  other  methods  by  which  one  may  send  money  from 
one  place  to  another. 

Any  of  the  New  York  banks  would  accept  the  draft  drawn 
by  the  Madison  bank  on  a  bank  in  New  York.  In  fact,  almost 
any  bank  in  the  United  States  would  cash  a  bank  draft  on 
New  York  or  Chicago  or  any  of  the  other  commercial  centers. 
Banks  in  which  other  banks  have  deposits  are  called  by  them 
correspondents  or  correspondent  banks. 

Nearly  all  banks  furnish  application  blanks  for  drafts  as 
shown  in  Form  XC. 

Form  XC. 


1901 


i 


I 


illllUlllllllIlli 

Form  of  Request  for  a  Draft 

In  buying  a  draft  at  a  bank  it  is  always  best  to  have  it 
made  payable  to  yourself,  and  then  indorse  it  in  favor  of  the 
party  to  whom  you  intend  to  transfer  it.  This  draft  will 
then  serve  as  a  receipt  if  proof  of  payment  is  necessary. 


DRAFTS  113 


EXERCISES  ON  CHAPTER  V. 

/.     How  many  parties  are  there  to  a  draft  ?    Name  them. 

2.  J.  B.  Shearer  &  Co.  of  Flagstaff,  Ariz.,  owe  you  $73.29. 
Draw  a  sight  draft  on  them  for  the  amount.  Write  a  letter 
to  them  advising  them  of  your  action.  To  whom  would  you 
send  this  draft  for  collection?  Suppose  J.  B.  Shearer  &  Co. 
do  not  accept  the  draft  on  presentation,  what  would  be 
done? 

j.  Where  are  the  drawee's  and  payee's  names  placed  on 
a  draft? 

4.  What  is  the  object  of  protesting  a  draft  ? 

5.  Render  Merritt  F    Oilman  of  Moberly,  Mo.,  a  state- 
ment of  account  containing  three  debits  and  one  credit  item. 
Draw  on  him  at  ten  days'  sight,  and  have  the  draft  discounted 
at  the  bank.     Write  him  with  reference  to  the  matter,  advis- 
ing him  of  your  action.     Mr.   Oilman  dishonors  the  draft 
because,  as  he  thinks,  there  is  a  mistake  in  your  statement  of 
account.     Write  his  letter  to  you.  r 

6.  In  your  opinion,  is  it  best  to  draw  on  a  good  customer 
without  his  consent  ?    Why  ? 

7.  How  can  payment  of  a  check  be  stopped  ? 

8.  V.  Y.   McClure  transfers  a  draft  to    you    by    blank 
indorsement.     Can  you  pay  a  bill  which  you  owe  to  Oeorge 
McMurray  &  Co.  with  the  same  ?    Why  ? 

p.  Explain  fully  the  difference  between  a  note,  a  check, 
and  a  draft. 

10.  Which  would  you  prefer  to  receive  in  payment  of  a 
bill :  a  check,  a  note  signed  by  one  person  without  indorse- 
ment, or  a  bank  draft  ?  Why  ? 

IT.  Explain  acceptance,  indorsement  in  full,  and  indorse- 
ment in  blank,  as  applied  to  commercial  paper. 

12.     What  do  we  mean  by  commercial  paper? 


H4      A  FIRST  BOOK  IN  BUSINESS  METHODS 

GENERAL  REVIEW  EXERCISES 

7.  How  would  you  address  a  letter  to  the  Governor  of  your 
state? 

2.  Mention  the  proper  titles  for  three  different  people  with 
whom  you  are  acquainted. 

j.  To  whom  is  a  general  letter  of  recommendation  ad- 
dressed ? 

4.  Write  a  short  letter  to  C.  J.  Williams  &  Co.  acknowledg- 
ing the  receipt  of  a  check  for  $250  to  apply  on  their  account, 
and  thanking  them  for  same. 

5.  Mr.  John  W.  Adams  sends  you  a  check  to  settle  his 
account,  but  has  deducted  a  trade  discount  of  10  per  cent 
amounting  to  $14.50,  to  which  he  is  not  entitled.    Write  a 
letter  to  him  calling  his  attention  to  the  matter,  and  return 
the  check  to  him  with  the  request  that  a  check  for  the  full 
amount  be  sent. 

6.  What  is  an  invoice  ? 

7.  On  May  2oth  you  sell  to  C.  D.  Davis  &  Co.,  Topeka, 
Kan.,  40  barrels  flour  at  $5.50  per  barrel,  2,245  pounds  corn 
meal  at  $1.15  per  hundred,  345  pounds  oatmeal  at  5  cents  per 
pound.     Make  out  an  invoice  of  same. 

8.  What  is  an  indorsement  ? 

p.  Where  is  the  proper  place  for  an  indorsement  on  a 
check  ? 

10.  How  can  you  determine  whether  it  is  necessary  that 
a  check  be  indorsed  or  not  before  presenting  it  for  payment  ? 

77.  Why  should  a  check  not  be  indorsed  until  just  before 
having  it  cashed  ? 

12.     Why  is  the  existence  of  promissory  notes  necessary  ? 

7j.  Why  is  a  written  promise  to  pay  better  than  a  verbal 
one?  ^ 

14.    What  does  negotiability  mean  ? 


DRAFTS 


TJ.  How  many  parties  are  there  to  a  note,  and  what  are 
they  called  ? 

16.    What  is  meant  by  the  maturity  of  a  note  ? 

77.  If  a  man  holds  a  note  which  is  already  indorsed  in 
blank,  and  transfers  it  by  mere  delivery,  what  responsibility 
does  he  assume  ? 

1 8.    When  is  a  note  said  to  be  dishonored  ? 

/p.    What  is  meant  by  days  of  grace  ? 

20.  If  a  note  falls  due  on  a  holiday,  when  should  it  be  pre* 
sented  for  payment? 


CHAPTER  VI. 

GENERAL  POSTAL  INFORMATION,  POST  OFFICE 

MONEY  ORDERS,  EXPRESS  MONEY  ORDERS, 

LETTERS  OF  CREDIT 


79.  General  Postal  Information.  The  postal  service  of 
the  United  States  is  maintained  by  the  Government  for 
the  benefit  of  the  people,  and  is  one  of  the  most  important 
branches  of  the  public  service.  It  is  not  intended  as  a  money- 
making  institution,  but  to  provide  a  safe  and  convenient 
method  of  transmitting  mail  matter  of  various  kinds  and  at 
small  expense. 

Mail  matter  is  divided  into  four  classes,  and  a  different  rate 
is  charged  for  each  class. 


DOMESTIC  POSTAGE  RATES 


LETTERS  AND  POSTAL  CARDS  WITHIN 
UNITED  STATES. 

Per  oz. 

Letters  to  any  part        .  . 

2cts. 
2cts. 
1  ct.  each 

10  cts. 
10  cts. 

City  drop  letters 

Postal  cards  to  any  part 

Registration  fee  In  addition  to  regular 

For  immediate  delivery,  in  addition  to 
regular  postage  

face  of  a  postal  card,  using  space  indicated.  A  card 
containing  any  threat,  offensive  dun,  or  any  scur- 
rilous or  jndeceut  communication  will  not  be  fi 


FIRST-CLASS  MATTER.— This  class  Includes  let- 
ters, postal  cards,  and  anything  sealed  or  other- 
wise closed  against  Inspection,  or  anything  con- 
taining writing  not  allowed  as  an  accompaniment 
to  printed  matter  under  class  three. 

Nothing  must  be  added  or  attached  to  a  postal 
card,  except  that  a  printed  address  slip  may  be 
pasted  on  the  address  or  message  side.  The  addi- 
tion of  anything  else  subjects  the  card  to  letter 
postage.  A  message  may  now  be  written  on  the 


warded.  The  rule  that  has  heretofore  existed 
excluding  from  the  face  of  a  postal  card  words 
indicating  the  occupation  or  business  of  the 
addressee  has  been  revoked.  These  additions,  or 
others  of  a  like  general  character,  are  now  held  to 
be  constructively  a  part  of  the  address,  and  theie- 
tore  permissible.  Cards  that  have  been  spoiled  in 
printing  or  otherwise  will  not  be  redeemed. 

"Private  Mailing  Cards"  bearing  written  mes- 
sages may  be  transmitted  in  the  ni:iils  at  the  rate 
of  a  cent  apiece,  stamps  to  be  affixed  by  the  sender; 
Bach  cards  to  be  sent  openly  in  the  mails,  to  be  no 
larger,  and  ro  be  approximately  of  the  same  form, 
quality,  and  weight  as  the  stamped  postal  c  >rd 
no\yiu  ireneral  use  in  the  United  States,  Private 
mailing  cards  sent  to  foreign  countries,  except  to 
those  where  there  is  a  special  rafe,  require  a  2c 
stamp. 

Rates  on  specially  delivered  letters,  ten  cents  or 
each  letter  in  addition  to  the  regular  postap 


[i  1 6] 


GENERAL  POSTAL  INFORMATION 


117 


This  entitles  the  letter  to  immediate  delivery  by 
special  messenger.  Ordinary  stamps,  to  the 
amount  of  ten  cents,  affixed  to  a  letter  bearing 
regular  postage,  entitles  it  to  special  delivery,  if 
it  is  so  marked. 

Letter  rates  are  charged  on  all  productions  by 
the  typewriter  or  manifold  process,  and  on  all 
printed  imitations  of  typewriting  or  manuscript, 
unless  such  reproductions  are  presented  at  post- 
office  windows  In  the  minimum  number  of  twenty 
Identical  copies. 

Letters  (but  no  other  class  of  mall  matter)  will 
be  returned  to  the  sender  free,  if  a  request  to  that 
effect  is  printed  or  written  on  the  envelope. 
There  Is  no  limit  of  weight  for  first-class  matter. 

Prepaid  leiters  will  be  reforwarded  from  one 
post-office  to  another  upon  the  written  request  of 
the  person  addressed,  without  additional  charge 
for  postage.  The  direction  on  forwarded  letters 
may  be  changed  as  many  times  as  may  be  neces- 
sary to  reach  the  person  addressed. 

SECOND-CLASS  si  ATT  KR— which  embraces  news- 
papers, magazines,  and  periodicals  published  not 
less  than  four  times  a  year,  when  mailed  by  pub- 
lisher or  news-agent  to  regular  subscribers,  one 
cent,  prepaid,  per  pound,  or  fraction  thereof. 
Second-class  matter  mailed  by  other  persons  than 
publishers  or  news-agents  becomes  special  mat- 
ter, specially  entitled  to  pass  through  the  malls  at 
one  cent  for  each  four  ounces  or  fraction  thereof. 
No  limit  as  to  weight. 

TillKD-CLASS  MATTER.— Mail  matter  of  the  third 
class  Includes  printed  books,  pamphlets,  engrav- 
ings, circulars  (in  print  or  by  the  hectograph, 
electric-pen,  or  similar  process),  and  other  matter 
wholly  in  print,  proof-sheets,  corrected  proof- 
sheets,  and  manuscript  copy  accompanying  the 
same. 

The  rate  on  matter  of  this  class  is  one  cent  for 
each  two  ounce*  or  fraction  thereof. 

Manuscript  unaccompanied  by  proof-sheets 
must  pay  letter  rates. 

Third-class  matter  must  admit  of  easy  inspec- 
tion, otherwise  it  will  be  charged  letter  rates  on 
delivery.  It  must  be  fully  prepaid,  or  it  will  not 
be  forwarded. 

The  limit  of  weight  is  four  pounds,  except  single 
books  in  separate  packages,  on  which  the  weight 
is  not  limited.  It  is  entitled,  like  matter  of  the 
other  classes,  to  special  delivery  when  ten  cents  in 
stamps  are  affixed  in  addition  10  the  regular 
postage. 

Upon  matter  of  the  third  class,  or  upon  the 
wrapper  or  envelope  inclosing  the  same,  or  the 
tag  or  label  attached  thereto,  the  sender  may 
write  his  own  name,  occupation,  and  residence  or 
business  address,  preceded  by  the  word  "from," 
and  may  make  marks  other  than  by  written  or 
printed  words  to  call  attention  to  any  word  or 
passage  In  the  text,  and  may  correct  any  typo- 
graphical errors.  There  may  be  placed  upon  the 
blank  leaves  or  cover  of  any  book,  or  printed 
matter  of  the  third  class,  a  simple  manuscript 
dedication  or  Inscription  not  of  the  nature  of  a 
personal  correspondence.  Upon  the  wrapper  or 
envelope  of  third-class  matter,  or  the  tag  or  label 
attached  thereto,  may  be  printed  any  matter 
mailable  as  third-class,  but  there  must  be  left  on 
the  address  side  a  space  sufficient  for  the  legible 
address  and  necessary  stamps. 

FOURTH.CLASS  MATTER.— Fourth-class  matter  Is 
all  mailable  matter  not  included  In  the  three  pre- 
ceding classes,  which  is  so  prepared  for  mailing 


,  as  to  be  easily  withdrawn  from  the  wrapper  and 
examined.  It  embraces  merchandise  and  samples 
of  every  description,  and  coin  or  specie. 

Kate  of  postage,  one  cent  for  each  ounce  or 
fraction  thereof  (except  seeds,  roots,  bulbs, 
cuttings,  coins,  and  plants,  the  rate  on  which 
is  one  cent  for  each  two  ounces  or  fraction 
thereof).  This  matter  must  be  fully  prepaid,  or 
it  will  not  be  forwarded.  The  affixing  of  ten  cents 
in  stamps  in  addition  to  the  regular  postage 
entitles  fourth-class  matter  to  special  delivery. 

Articles  of  this  class  that  are  liable  to  injure  or 
deface  the  mails,  such  as  glass,  sugar,  needles, 
nails,  pens,  etc.,  must  be  first  wrapped  In  a  bag, 
box,  or  open  envelope,  and  then  secured  In  another 
outside  tube  or  box,  made  of  metal  or  hard  wood, 
without  sharp  corners  or  edges,  and  having  a  slid- 
ing clasp  or  screw  lid,  thus  securing  the  articles 
In  a  double  package. 

Poisons,  explosives,  or  inflammable  articles,  live 
animals,  insects,  or  substances  exhaling  a  bad  odor 
will  not  be  forwarded. 

Firearms  may  only  be  sent  In  detached  parts. 

The  regulations  respecting  the  mailing  of  liq- 
uids are  as  follows:  Liquids,  not  ardent,  vinous, 
spirituous,  or  malt,  and  not  liable  to  explosion, 
spontaneous  combustion,  or  ignition  by  shock  01 
jar,  and  not  Inflammable  ( such  as  kerosene,  naph- 
tha, or  turpentine),  may  be  admitted  to  the  mails 
for  transportation  within  the  United  States. 
When  in  glass  bottles  or  vials,  such  bottles  or 
vials  must  be  strong  enough  to  stand  the  shock 
of  handling  in  the  malls,  and  must  be  enclosed  in 
a  metal,  wooden,  or  papier  mache  block  or  tube, 
not  less  than  three-sixteenths  of  an  inch  thick  In 
the  thinnest  part,  strong  enough  to  support  the 
weight  of  mails  piled  in  bags  and  resist  rough 
handling;  and  there  must  be  provided,  between 
the  bottle  and  said  block  or  tube,  a  cushion  of 
cotton,  felt,  or  some  other  absorbent  sufficient  to 
protect  the  glass  from  shock  in  handling;  the 
block  or  tube  to  be  closed  by  a  tightly  fitting  lid 
or  cover,  so  adjusted  as  to  make  the  block  or  tube 
water  tight  and  to  prevent  the  leakage  of  the 
contents  in  case  of  breaking  the  glass.  When  in- 
closed in  a  tin  cylinder,  metal  case,  or  tube,  such 
cylinder,  case,  or  tube  should  have  a  lid  or  cover 
so  secured  as  to  make  the  case  or  tube  water- 
tight, and  should  be  securely  fastened  In  a  wooden 
or  papier  iviache  block  (open  only  at  one  end) ,  and 
not  less  in  thickness  and  strength  than  above  de- 
scribed. Manufacturers  or  dealers  intending  to 
transmit  articles  or  samples  In  considerable  quan- 
tities should  submit  a  sample  package,  showing 
their  mode  of  packing,  to  the  postmaster  at  the 
mailing  office,  who  will  see  that  the  conditions  of 
this  section  are  carefully  observed.  The  limit 
of  admissible  liquids  and  oils  is  not  exceeding 
four  ounces,  liquid  measure. 

Limit  of  weight  of  fourth-class  matter  (except- 
ing liquids),  four  pounds. 

The  name  and  address  of  the  sender,  preceded 
by  the  word  "from,"  also  any  marks,  numbers, 
names,  or  letters  used  for  description,  such  as 
prices,  quantity,  etc.,  may  be  written  on  the  wrap, 
per  of  tourth-cliiss  matter  without  additional  post- 
age charge.  A  request  to  the  delivering  post- 
master may  also  be  written  asking  him  to  notify 
the  sender  in  case  the  package  is  not  delivered. 

CANADA. -Same  as  In  the  United  States,  except 
seeds,  scions,  bulbs,  cuttings  and  roots  are  one 
cent  per  ounce. 

CT'BA.-The  United  States  domestic  rates  of 
postage  and  classification  apply  to  all  mail  mat- 
ter passing  between  the  United  States  and  Cuba 


ii8      A  FIRST  BOOK  IN  BUSINESS  METHODS 


MEXICO.— Same  as  in  the  United  States.    Limit  Commercial  Papers— 5c  for  the  first  10  ounces  or 

of  weight  of  single  package,  1  Ibs.  and  6  OK.,  ex-"  less,  and  Ic  for  each  additional  2  ounces  or  frac- 

cept  single  printed  books,  which  may  weigh  more.  tion  thereof.    Limit  of  weight,  4  pounds  and    6 

Merchandise  must  be  sent  by  parcel  post.  ounces. 

Samples  of  Merchandise— 2c  for  the  first  4  ounces 

.  _.«.«._.  ~  or  less,  and  Ic  for  each  additional  2  ounces  or  frac- 

FOREICN  POSTAGE  RATES  tion  thereof.    Limit  of  weight.  12  ounces. 

Parcel  Post  Exchange— A  parcel  sent  as  parcel 

Letters— 5c  fortlie  first  ounce  or  fraction  thereof,  post  musr  not  be  pot-ted  in  a  letter  box,  but  must 

and  3c  for  each  additional  ounce.  be  mailed  at  the  Foreign  Branch,   General  Post 

This  rate  applies  to  all  countries  in  Postal  Union,  Office,  or  at  uny  postal  station.  Postage,  12c  a  pound 

except  countries  above  named,  also  letter  mail  to  or  fraction  thereof.    Limit  of  weight,  11  pounds. 

Great   Britain,    Ireland,    Germany     (in    German  Ordinary  letters  for  any  foreign  country  (except 

steamers  only),  and  Newfoundland,  for  which  see  Canada,  Cuba,  and  Mexico)  must  be   forwarded 

U.  S.  rates.  whether  any  postage  is  paid  on  them  or  not.    All 

Postal  Cards— Single,  2c  each;  double,  4c  each.  other  mailable  matter  must  be  prepaid,  at  least 

Registration  Fee  on  letters  or  other  articles,  lOc  partially, 

each.  .    U.S.  Army  and  Navy-Rates  on  mail  addressed  to 

Printed  Matter— Ic  for  each  2  ounces  or  fraction  a  member  of  the  U.  8.  Army  or  Navy,  repardless  of 

thereof.    Limit  of  weight,  4  pounds  and  6  ounces.  where  stationed,  are  the  same  as  domestic. 

So.  Post  Office  Money  Orders.  The  method  used  by 
most  business  men  for  paying  accounts  or  obligations  in  a 
distant  city  is  by  bank  draft.  There  are,  however,  other 
methods  as  safe  and  almost  as  convenient.  One  is  by  post 
office  money  order,  a  method  which  positively  insures  the 
sender  against  loss.  All  post  offices  are  not  money  order 
offices,  and  post  office  money  orders  may  be  used  to  send 
money  only  to  those  places  where  there  are  such  offices. 
The  cost  varies  with  the  amount  of  the  order  issued. 

At  all  money  order  offices,  money  order  blanks  like 
that  shown  in  Form  XCI.  will  be  found.  On  this  blank 
the  sender  makes  a  written  application  for  the  money  order 
which  he  wishes  to  send. 

81.  Collection  of  Post  Office  Money  Orders.  After  the 
application  is  made  out  and  the  money  for  the  order  and 
the  charges  for  same  are  paid  to  the  postmaster,  the  pur- 
chaser is  given  an  order  by  the  postmaster  which,  after 
detaching  and  retaining  the  receipt  at  the  right,  he  will  send 
to  the  person  to  whom  he  wishes  to  pay  the  money.  The 
money  order  contains  the  name  of  the  sender  and  of  the 
payee,  who  must  be  identified  when  he  presents  the  order 
to  the  postmaster  at  the  place  where  it  is  to  be  paid.  No 


GENERAL  POSTAL  INFORMATION 


ng 


Form  XCI. 


Dollars          Cents 


Stamp  of  IssuJnc  Office 


$ 


(Form  No.  6001) 


The  Postmaster 
will  Insert 

here „ 

the  office  drawn  on,  when  the  office  named  by  the  remitter  in  the  body 
of  this  application  Is  not  a  Money  Order  Office. 

Spaces  above  this  line  are  for  the  Postmaster's  record,  to  be  filled  in  by  him. 

Application  for  Domestic  Money  Order 

Spaces  below  to  be  filled  in  by  purchaser,  or,  If  necessary, 
by  another  person  for  him 

Amount 

Dollars Cents 

Pay  to      I 

Order  of  / 

(Name  of  person  or  firm  for  whom  order  Is  intended) 

Whose 
Address 

is       j   No Street 

Post      ) 

Office    f _ 

State , 

Sent  by 

(Name  of  Seuder) 

Address ) 

ol       y 
seuder  J    No. Street 

PURCHASER  MUST  SEND  ORDER  (ON  BLUE  PAPER)  TO  PAYEE 


120      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  XCII. 

Fees  for  Money  Orders  drawn  on 
Domestic  Form 

Payable  in  the  United  States  (which  includes  Hawaii 
and  Porto  Rico)  and  its  possessions  comprising  the  Canal 
Zone  (Isthmus  of  Panama),  Guam,  the  Philippines  and 
Tutuila,  Samoa  ;  also  for  Orders  payable  in  Bermuda,  British 
Guiana.  British  Honduras,  Canada,  Cuba,  Mexico,  Newfound- 
land, the  United  States  Postal  Agency  at  Shanghai  (China), 
the  Bahama  Islands,  and  certain  other  Islands  in  the  West 
Indies  mentioned  in  Register  of  Money  Order  Post  Offices. 

For  Orders  From  S  0.01  to  5    2.50       3  cents. 

From  5  2.51  to  S    5.00       .  ....  Scents. 


From  $  5.01  to  S  10.00 
FromS10.0l  to$  20.00 
From  $20.01  to  8  30.00 
From  $30.01  to  8  40.00 
From  $40.01  to  8  50.00 
From  850.01  to  8  60.00 
From  860.01  to  $  75.00 
From  875.01  to  8100.00 


8  cents. 

....10  cents. 
....12  cents. 

15  cents. 

....18  cents. 
. . .  .20  cents. 
. . .  .25  cents. 
— 30  cents. 


Memoranda  of  Issuing  Postmaster: 


NOTB.— The  maximum  amount  for  which  >i  single  Money  Order  may  be  issued  is  $100.  When 
*  larger  sum  is  to  be  sent  additional  Orders  must  be  obtained.  Any  number  of  Orders,  may  be 
drawn  on  any  Money  Order  office:  but.  if  Orders  are  dr&wn  in  excess  of  $200  on  any  one  day 
apon  an  office  of  the  4th  class,  notice  of  the  fact  by  letter  for  Form  6037  )  is  to  be  promptly  sent  the 
Department  by  the  issuing  Postmaster  so  that  provision,  may  be  made  for  payment. 

Applications  must  be  preserved  at  the  office  of  issue  for  four  years  from  date  of  issue. 
(BoitioN  December,  1909.) 


GENERAL   POSTAL   INFORMATION 


121 


money  passes  between  one  office  and  the  other,  merely  the 
order  from  one  postmaster  to  the  other  to  pay  the  amount 
on  the  presentation  of  the  order  by  the  proper  party.  This 
order  from  one  postmaster  to  another  is  very  similar  then  to 
a  bank  draft.  The  postmaster  will  not  pay  the  order  to  the 
person  named  until  he  has  satisfactory  proof  that  the  person 
holding  the  order  is  the  person  named  therein. 


Form  XCIII. 


10100 


Chicago,  in. 


171434 


171434 


171434 

RECEIPT 


Form  for  a  Postal  Money  Order 

Before  paying  the  order  the  postmaster  will  require  the 
holder  to  receipt  it.  It  is  well,  when  one  wishes  to  have  a 
postal  money  order  cashed  in  a  strange  city,  to  have  some 
person  identify  him.  If  this  is  not  practicable,  he  will 
doubtless  be  required  to  exhibit  papers  of  some  kind  through 
which  he  may  establish  his  identity  to  the  satisfaction  of  the 
postmaster. 

A  post  office  money  order  may  be  transferred  by  indorse- 
ment, but  only  once.  Banks  frequently  accept  money  orders 
on  deposit  from  their  customers,  but  stamps  of  banks  through 
whose  hands  the  order  has  passed  are  not  regarded  as  indorse- 
ments. 


122     A  FIRST  BOOK  IN   BUSINESS  METHODS 

82.  Express  Money  Orders.  All  the  leading  express 
companies  issue  money  orders  payable  at  any  of  their  offices. 
As  these  companies  have  offices  in  the  principal  cities  of 
Europe,  where  such  orders  may  be  cashed,  this  is  a  very 
convenient  means  of  carrying  credit  when  traveling.  Express 
money  orders  may  be  secured  at  any  office  by  making  a  writ- 
ten application  and  paying  a  small  fee.  These  orders  are 
negotiable  to  any  extent,  and  are  received  by  banks  on  deposit 
as  readily  as  checks  or  drafts.  When  the  order  is  purchased, 
the  agent  gives  a  receipt  which  should  be  preserved,  for, 
should  the  order  be  lost,  the  amount  of  the  order  can  be 
secured  by  giving  the  company  an  indemnity  bond  similar 
to  the  one  given  in  the  case  of  a  lost  or  stolen  note. 

Form  XCIV. 

II-  3556953       I    1 1"  355695s" 


PAY  TO  THE  ORDER  OF . „ 

THE  SUM  OF : ,-™^      .-.-^.— „_  „ „ TooDoLLARS 


An  American  Express  Company  Money  Order 

At  times  it  is  necessary  to  send  money  by  telegram.  This 
method  is  very  expensive,  and  for  this  reason  it  is  used  only 
in  case  of  great  necessity.  Comparatively  few  of  the  tele- 
graph offices  in  the  United  States  are  money  order  offices. 
The  charge  is  i  per  cent  of  the  amount,  plus  twice  the  toll 
of  a  single  fifteen-word  message  between  the  two  places. 


GENERAL  POSTAL  INFORMATION  123 


83.  Registered  Packages.    The  United  States  Govern- 
ment, through  its  mail  department,  registers   letters   and 
packages  of  all  descriptions  for  the  trifling  sum  of  10  cents 
above  the  regular  postage.     Money  is  oftentimes  sent  by  this 
method,  but  the  registration  carries  only  a  fifty-dollar  guar- 
anty that  it  will  be  delivered.     Much  currency  and  valuable 
paper  is,  however,  sent  through  the  registered  mail,  the  pack- 
age being  often  insured  in  an  insurance  company.     Every 
post  office  through  which  it  passes  must  keep  track  of  it,  and 
should  the  package  be  stolen,  the  post  office  officials  will  make 
a  strong  effort  to  discover  the  thief.     The  name  and  address  of 
the  sender  must  be  given  on  the  outside  of  the  envelope  or 
wrapper  of  all  registered  articles.    All  letters  sent  through  the 
mails  should  bear  the  name  of  the  sender,  so  that  they  may 
be  returned  to  the  writer  if  necessary.     All  post  offices  are 
register  offices,  and  money  is  sent  by  registered  mail  usually 
from  such  offices  as  are  not  money  order  offices  or  such  towns 
as  do  not  have  express  offices. 

84.  Coin  or  Bullion  by  Expre-ss.    By  far  the  safest  method 
of  sending  actual  coin,  currency,  or  bullion  from  one  place  to 
another  is  by  express.     The  money  is  placed  in  an  envelope 
by  the  shipper  and  is  not  counted  by  the  express  companies. 
They  simply  guarantee  the  safe  delivery  of  the  package. 
The  cost  of  shipping  money  by  this  method  varies  with  the 
amount  sent  and  the  distance  traveled.     Large  shippers  of 
money  secure  a  special  rate  from  the  company.    The  United 
States  is  given  the  very  low  rate  of  15  cents  for  every  $1,000 
in  currency,  but  as  large  amounts  are  carried  the  business  is 
profitable.     Express  companies  have  occasionally  carried  as 
much  as  $16,000,000  at  one  time  between  Washington  and 
New  York. 


124     A  FIRST  BOOK  IN  BUSINESS  METHODS 


85,  Letters  of  Credit.  Many  persons  visit  foreign  coun- 
tries each  year  for  pleasure  or  for  the  purpose  of  buying 
goods  or  live  stock,  or  of  doing  other  kinds  of  business. 
They  do  not  wish  to  carry  the  amount  of  money  with  them 
which  they  may  need,  for  it  would  be  both  inconvenient  and 
unsafe ;  therefore,  they  take  with  them  either  letters  of 
credit  or  bills  of  exchange. 

A  letter  of  credit  is  a  letter  issued  by  a  bank,  in  which  the 
writer  authorizes  the  person  addressed  to  pay  a  certain  sum 
of  money  to  the  bearer.  The  bearer  must  be  fully  identified 
and  comply  strictly  with  all  the  conditions  of  the  letter  before 
he  can  receive  the  money. 

On  the  paper  called  the  letter  of  credit  is  printed  a  list 
of  the  correspondents  of  the  issuing  bank,  and  the  buyer  of 
the  letter  can  secure  all  or  any  part  of  the  value  at  any  of  the 
banks  mentioned.  These  banks  are  located  in  the  principal 
cities  of  one  or  various  foreign  countries.  If  the  traveler 
wishes,  he  may  have.the  letter  made  out  payable  in  the  money 
of  any  of  the  countries.  If  in  England,  it  would  be  payable 
in  pounds ;  if  in  France,  in  francs ;  if  in  Germany,  in  marks. 
When  the  traveler  receives  the  letter  of  credit,  he  signs  his 
name  on  its  face  and  also  gives  the  issuing  banker  various 
other  signatures,  which  are  forwarded  to  the  correspondent 
banks.  The  signature  of  the  holder  in  the  presence  of  the 
banker  will  then  serve  as  an  identification.  As  various  sums 
are  drawn,  the  amounts  are  entered  on  the  back  of  the  letter, 
thus  enabling  the  correspondent  banker  to  -see  readily  how 
much  is  due  the  holder.  When  the  last  of  the  money  is 
drawn,  the  letter  is  taken  up,  canceled,  and  returned  to  the 
issuing  bank.  This  letter  of  credit  answers  the  same  pur- 
pose as  a  bank  draft.  Should  it  be  lost,  the  issuing  and  cor- 
respondent banks  should  be  immediately  notified. 


GENERAL  POSTAL  INFORMATION  125 


Example:  Suppose  Mr.  Henry  Thompson  of  Chicago  wishes 
a  letter  of  credit  to  the  amount  of  $5,000,  on  some  banking  house 
in  Leipzig,  Germany.  He  may  go  to  one  of  the  banks  in  his  city 
and  leave  as  security  money  or  bonds  or  other  articles  of  value, 
and  the  bank  will  then  issue  to  him  a  letter  of  credit.  The  money 
expressed  in  the  letter  of  credit  would  be  in  marks,  as  that  is  the 
unit  of  value  of  German  money.  The  value  of  a  mark  is  equal  to 
about  23.3  cents  of  United  States  money,  and  $5,000  would  be  equal 
to  a  little  more  than  2 1,000  marks.  The  letter  of  credit  would  read 
as  follows  : 

Form  XCV. 

LETTER   OF  CREDIT 

CHICAGO,  ILL.,  June  28,  1896. 
MESSRS.  KNAUTH,  NACHOD  &  KUHNE, 
Leipzig,  Germany. 

GENTLEMEN:  We  take  pleasure  in  introducing  to  you  Mr. 
Henry  Thompson,  who  purposes  visiting  Germany  and  France, 
and  desires  us  to  open  a  credit  with  you  for  him  for  twenty-one 
thousand  marks.  You  will  please  honor  his  drafts  to  an  amount 
not  exceeding  the  above-named  sum,  and  charge  the  same  to  us, 
with  advice. 

The  signature  of  Mr.  Thompson  accompanies  this. 
Yours  very  respectfully, 

BROWN  &  WILSON. 

[Signature  of  Henry  Thompson.] 

Messrs.  Brown  &  Wilson  also  send  to  the  banking  house  of 
Knauth,  Nachod  &  Kuhne,  by  mail,  a  letter  similar  to  the  form 
given  below,  notifying  them  that  they  have  issued  to  Mr.  Thomp- 
son a  letter  of  credit  to  the  amount  of  21,000  marks,  and  giving 
them  a  description  of  him.  If  the  letter  of  credit  is  not  accepted 
by  the  person  to  whom  it  is  addressed,  the  writer  of  the  letter 
should  at  once  be  notified. 


126      A  FIRST  BOOK  IN  BUSINESS  METHODS 

Form  XCVI. 

LETTER  SENT  BY  MAIL 

CHICAGO,  ILL.,  June  28,  1896. 
MESSRS.  KNAUTH,  NACHOD  &  KUHNE, 
Leipzig,  Germany. 

GENTLEMEN  :  We  have  to-day  granted  a  letter  of  credit 
on  your  house  (as  per  enclosed  duplicate)  to  Mr.  Henry  Thomp- 
son, for  21,000  marks.  Mr.  Thompson  is  forty-five  years  of  age, 
five  feet  nine  inches  tall,  has  a  light  complexion,  with  light  hair 
and  blue  eyes.  Yours  very  truly, 

BROWN  &  WILSON. 


Mr.  Thompson,  having  his  letter  of  credit,  needs  to  take  only 
enough  money  for  his  journey  to  Leipzig.  Arriving  in  that  city, 
he  may  draw  from  the  banking  house  of  Knauth,  Nachod  &  Kiihne 
any  amount  not  exceeding  21,000  marks.  They  will  run  no  risk, 
because  they  have  the  letter  from  the  bank  in  Chicago  giving  a 
description  of  Mr.  Thompson,  and  also  agreeing  to  be  responsible 
for  any  amount  Mr.  Thompson  may  draw  not  exceeding  21,000 
marks.  Mr.  Thompson  could  have  taken  a  bill  of  exchange,  but 
when  he  wished  to  have  it  cashed  at  some  banking  house  in 
Germany  he  would  need  to  be  identified,  and  if  he  had  no  acquaint- 
ances there,  it  would  be  difficult  to  get  some  one  to  do  this. 
The  letter  written  by  the  bank  giving  a  complete  description  of 
him  enables  him  to  establish  his  identity  to  the  banking  house 
of  Knauth,  Nachod  &  Kiihne. 

However,  people  may  purchase  bills  of  exchange  (see  §  87) 
to  take  with  them  when  traveling  in  foreign  countries. 
Sometimes  they  take  bank  drafts  on  some  bank  in  New  York. 
These  drafts  may  be  cashed  at  any  banking  house  in  Europe 
by  paying  a  small  amount  for  exchange  and  by  being  properly 
identified. 


GENERAL   POSTAL   INFORMATION 


127 


86.  Travelers'  Checks.  Travelers  checks  are  now  issued 
by  express  companies  and  by  the  American  Bankers  Associa- 
tion. These  are  largely  taking  the  place  of  letters  of  credit, 
bills  of  exchange,  and  bank  drafts.  When  these  checks  are 

Form  XCVII. 


Travelers'  Checks 

purchased  the  purchaser  signs  his  name  on  the  check,  and 
when  the  check  is  cashed  he  again  places  his  name  on  it, 
which  establishes  his  identity. 

These  checks  may  be  had  in  any  quantity  and  in  the 
denominations  of  $10,  $20,  $50,  and  $100  (express  companies 


128     A  FIRST   BOOK  IN   BUSINESS   METHODS 


issue  a  check  for  $200)  with  the  exact  amount  of  foreign  money 
paid  therefor  in  the  principal  countries  of  Europe  printed  on 
each  check.  As  these  checks  may  be  cashed  in  any  of  the 
principal  cities  of  the  world,  they  afford  a  very  convenient 
and  safe  form  of  travelers'  credit. 

Form  XCVIII. 


1346  CHICAGO,  ILL., Oct-  **>       19  01 

MARKS,    1^75.85 

Thirty  days AFTER  DATE  (DUPLICATE  UNPAID)  PAY  TO  THE 

ORDER  OF Knauth,  Nachod  &  Kuhne, 

One  thousand  eight  hundred  and  seventy-five  and  85  MARXS 

100 

VALUE  RECEIVED,  AND  CHARGE  THE  SAME  TO  OUR  ACCOUNT. 

.  Wilson  &  Co. 


A  Foreign  Draff —  f he  Original 


134G  CHICAGO,  in..,       Oct. 

1875.85 


Thirty  days  AFTFR  DATE  (ORIGINAL  UNPAID)  PAY  TO  THE 
ORDER  OF  _  Knauth,  Nachod  &  Kuhne,  __ 
One  thousand  eight  hundred  and  seventy  -five  and  85  MAR[CS 

100 

VALUE  RECEIVED,  AND  CHARGE  THE  SAME  TO  OUR  ACCOUNT. 

**££!£?*•  Janes  H.WUson*  Co. 


The  Duplicate  of  the  above  Foreign  Draft 


GENERAL  POSTAL  INFORMATION  129 


87.  Bills  of  Exchange.  A  draft  drawn  by  one  bank  on 
another  in  its  own  country  is  sometimes  called  an  inland  bill 
of  exchange.  If  it  is  drawn  upon  a  bank  in  another  country  it 
is  called  a  foreign  bill  of  exchange. 

Foreign  bills  of  exchange  were  formerly  drawn  in  sets  of 
two  or  three  and  were  sent  by  different  mails,  so  that  if  one 
should  get  lost  the  other  would  probably  reach  its  destination 
and  thereby  save  any  unnecessary  delay  and  annoyance  ;  for 
the  person  in  whose  favor  the  bill  of  exchange  was  drawn 
could  get  the  one  that  reached  him  first  cashed  at  once. 

Drafts  drawn  on  private  individuals  or  on  business  firms  in 
foreign  countries  were  also  drawn  in  duplicate,  and  this  method 
is  still  used  to  some  extent,  especially  if  the  draft  is  for  pay- 
ment  of  goods,  and  is  attached  to  a  bill  of  lading;  for,  if  a 
single  draft  be  drawn  and  is  lost,  the  consignee  could  not  get 
his  goods  until  a  duplicate  could  be  obtained.  It  has  become 
customary  for  banks  in  nearly  all  cases  to  issue  foreign  bills  of 
exchange  singly. 

QUESTIONS  AND  EXERCISES  ON  CHAPTER  VI. 

/.     What  is  meant  by  first-class  mail  matter  ? 

2.  What  is  second-class  mail  matter? 

3.  Name  some  articles  which  are  third-class  mail  -matter ; 
fourth-class. 

^.  How  much  would  it  cost  to  send  by  mail  a  package  of 
merchandise  weighing  six  ounces  ? 

5.  Name  some  articles  which  cannot  be  sent  by  mail. 

6.  How  much  would  it  cost  to  send  a  letter  from  Chicago, 
111.,  to  London,  England?     How  much  to  send  a  letter  from 
Detroit,  Mich.,  to  Mexico  ? 

7.  What  is  the  limit  of  weight  for  third-class  matter? 


130     A  FIRST  BOOK  IN  BUSINESS  METHODS 


8.  What  is  a  post  office  money  order  ? 

9.  Do  all  post  offices  issue  money  orders  ? 

10.  For  how  large  an  amount  may  a  post  office  money 
order  be  purchased  ? 

//.  What  is  the  cost  of  having  a  letter  or  package  regis- 
tered ? 

*2.    What  is  a  letter  of  credit? 

ij.    What  is  a  domestic  bill  of  exchange  ? 

7^.     What  is  a  foreign  bill  of  exchange  ? 

75.  Is  a  letter  of  credit  more  convenient  for  a  person 
traveling  in  Europe,  and  if  so,  why  ? 

16.  Why  are  foreign  bills  of  exchange  usually  drawn  in 
sets  of  two  or  three  ? 

GENERAL  REVIEW  EXERCISES 

7.  J  S.  Harwood  is  owing  you  $125  on  account,  which 
is  past  due.  He  sends  you  a  check  for  $75.00  in  part  pay- 
ment, and  asks  for  more  time  in  which  to  pay  the  balance. 
Write  a  letter  thanking  him  for  the  remittance,  and  also 
grant  his  request  for  more  time  for  payment  of  the  balance, 
but  stipulate  when  the  money  shall  be  paid. 

2.  You  receive  a  letter  from  H.  B.  Miller  &  Co.  of  Rock- 
ford,  Iowa,  claiming  that  the  goods  you  sent  them  in  your  last 
shipment  were  of  inferior  quality,  and  asking  for  a  rebate  of 
$25.00.  Write  their  letter. 

j.  Write  a  polite  reply  to  their  letter,  declining  to  allow 
them  a  rebate,  and  tell  them  why. 

4.  What  is  the  object  in  post-dating  a  check? 

5.  Why  is  it  better  to  have  a  check  drawn  payable  to  the 
" order"  of  the  payee  than  to  "bearer"? 

6.  If  a  person  has  a  check  which  he  does  not  wish  to  use 
for  some  days,  why  is  it  better  to  have  it  certified  ? 


GENERAL  POSTAL  INFORMATION  131 


7.  What  is  a  restrictive  indorsement  ? 

8.  What  is  meant  by  the  term  "  joint  makers  "  ? 

p.     What  does  the  expression  "  without  recourse  "  mean? 

10.  Of  what  use  are  drafts  ? 

11.  Explain  how  collections  are  made  by  drafts. 

12.  If  a  draft  is  drawn  by  one  person  upon  another  who  is 
in  his  debt,  is  the  drawee  obliged  to  accept  the  draft  ? 

ij.  If  he  did  not  accept  it,  what  object  would  there  be  in 
having  it  protested  ? 

14.    What  is  an  accommodation  note  ? 

/5.  What  is  the  object  in  signing  as  an  accommodation 
party  ? 

16.     When  is  a  note  said  to  be  outlawed? 


CHAPTER  VII. 

PETITIONS,   POWER    OF  ATTORNEY,    COMMERCIAL 
AGENCIES,  MISCELLANEOUS 

88.  Forms  of  Petitions.  Most  people,  whether  living  in 
a  city,  town,  or  in  the  country,  sometimes  have  occasion  to 
petition  those  in  authority  for  some  improvement  which  they 
wish  to  have  made,  or  the  abatement  of  some  nuisance,  or  for 
the  granting  of  some  favor,  or  the  enactment  of  some  law. 
While  it  is  a  very  simple  matter  to  write  a  petition,  those  who 
have  had  but  little  experience  in  matters  of  this  kind  may 
find  the  following  forms  of  assistance : 

Form  XCIX. 

PETITION  FOR  OPENING  A  STREET 

To  the  Mayor  and  Aldermen  of  the  City  of  Burlington,  in  Common 

Council  assembled: 

GENTLEMEN:  The  undersigned  respectfully  solicit  your  hon- 
orable body  to  open  and  extend  Walnut  Street,  which  now  termi- 
nates at  Adams  Street,  through  blocks  Nos.  10  and  12  in  Hall's 
Addition,  to  Benton  Street,  thereby  making  Walnut  Street  a 
nearly  straight  and  continuous  street  for  two  miles,  and  greatly 
accommodating  the  people  in  that  portion  of  the  city. 

(Here  insert  city,  state,  and  date.) 

(Signed  by  two  hundred  taxpayers,  more  or  less.) 

[132] 


PETITIONS  133 


Form  C. 

PETITION  TO  SCHOOL  BOARD 

To  the  Honorable  Members  of  the  Board  of  Education  of  the  City 

of  Racine  : 

GENTLEMEN:  We,  the  undersigned  citizens  of  the  city  of  Racine, 
are  personally  acquainted  with  Mr.  John  Wood  of  this  city,  and 
know  him  to  be  an  industrious  and  reliable  man  who  we  believe 
would  fill  the  position  of  janitor  of  our  High  School  building  in  a 
very  satisfactory  manner.  As  he  is  desirous  of  obtaining  this 
position,  we  respectfully  petition  your  honorable  body  to  appoint 
him  to  fill  the  place. 

(Here  insert  city,  state,  and  date.) 

Form  CI. 

PETITION  TO  A  GOVERNOR 

To  His  Excellency ,  the  Governor  of  the  State  of. : 

The  petition  of  the  subscribers,  citizens  of ,  in  the 

County  of ,  State  of ,  respectfully  shows  that,  etc. 

(as  in  the  above  forms). 

89.  Heading  for  a  Subscription  Paper.  It  is  a  very  sim- 
ple matter  to  arrange  the  heading  for  a  subscription  paper, 
but  for  one  who  has  had  no  experience  in  such  matters,  the 
following  form  may  be  of  assistance : 

Form  CII. 

We,  the  undersigned,  hereby  subscribe  and  agree  to  pay  the  amount  set 
opposite  our  respective  names  to  William  Wood,  for  the  purpose  of  defraying 

the  expenses  of  a  Street  Fair  to  be  held  in  the  city  of ,  October  4th, 

5th,  and  6th,  1901. 

Name.  Amount.  Name.  Amount. 

NOTE. — The  writing  should  be  very  plain  and  the  wording  as  brief  as  pos- 
sible to  explain  fully  the  object  for  which  the  money  is  subscribed. 


134     A  FIRST  BOOK  IN  BUSINESS  METHODS 


90.  Proxy.     A  proxy  is  a  writing"  by  which  one  person 
authorizes  another  to  vote  in  his  place. 

Form  CHI. 

KNOW  ALL  MEN  BY  THESE  PRESENTS,  That  /,  Hiram  S.  Cole 

of ,  do  hereby  appoint  George  W.  Woodworth  of , 

my  attorney  for  me  in  my  stead,  to  vote  as  my  proxy,  at  a  certain  election  of 

directors  of  the Company,  to  be  held  on  the day  of , 

1902,  according  to  the  number  of  votes  /  should  be  entitled  to  cast  if  per- 
sonally present. 

Witness  my  hand  and  seal  thisyfrj/  day  of  November^  1902. 

HIRAM  S.  COLE. 

91.  Power  of  Attorney.    It  is  sometimes  necessary  for  a 
firm  or  an  individual  doing  a  large  business  to  employ  others 
to  act  as  collectors  or  agents,  and  .they  are  frequently  required 
to  transact  business  a  long  distance  -  from  the  home  office, 
where  it  may  be  necessary  for  the  agent  to  sign  a  deed  or 
execute  a  mortgage.    In  such  cases  the  agent  is  given  what  is 
termed  a  power  of  attorney,  which  permits  him  to  exercise  the 
same  authority  as  the  principal  would  have. 

Form  CIV. 

KNOW  ALL  MEN   BY  THESE   PRESENTS,  That  /,  Charles  W. 

Carson  of  Jackson,  in  the  County  of  Jackson  and  State  of  Michigan,  have 
made,  constituted,  and  appointed,  and  by  these  presents  do  make,  constitute, 
and  appoint  Glen  W.  Rogers  of  Sal 'em ,  County  of  Marion  and  State  of 
Illinois,  a  true  and  lawful  attorney  for  me,  and  in  my  name;  place,  and  stead, 
and  in  my  behalf,  to  [here  insert  the  things  which  the  attorney  is  to  do], 
hereby  giving  and  granting  unto  my  said  attorney  full  power  and  authority  in 
the  premises  to  do  and  perform  all  such  acts,  matters,  and  things  as  my  said 
attorney  shall  deem  necessary  and  expedient  for  the  completion  of  the  authority 
hereby  given,  as  fully  as  /  might  or  could  do  if  personally  present,  hereby 
ratifying  and  confirming  all  that  my  said  attorney  shall  lawfully  do  or  cause 
to  be  done  by  virtue  hereof. 

In  witness  whereof,  /  have  hereunto  set  my  hand  and  seal,  this  third 
day  of  June,  in  the  year  of  our  Lord  one  thousand  eight  hundred  and  ninety- 
seven. 

Signed  and  sealed  in  the  presence  of  )  CHARLES  W.  CARSON. 
\  [SEAL.] 


COMMERCIAL  AGENCIES  135 

Form  CV. 

REVOCATION  OF  POWER  OF  ATTORNEY 

KNOW  ALL  MEN  BY  THESE  PRESENTS,  That  whereas,  /,  John 
E.  Smith,  in  and  by  my  letter  of  attorney  bearing  date  August  4,  1897,  did 
make,  constitute,  and  appoint  Samuel  Jones  my  attorney,  as  by  the  said  letter 
of  attorney  will  more  fully  and  at  large  appear  : 

Now  know  ye,  that  /,  the  said  John  E.  Smith,  have  revoked,  counter- 
manded, and  made  void,  and  by  these  presents  do  revoke,  countermand,  and 
make  void,  the  said  letter  of  attorney  above  mentioned,  and  all  power  and 
authority  thereby  given  or  intended  to  be  given  to  the  said  Samuel  Jones. 

In  witness  whereof,  /have  hereunto  set  my  hand  and  seal  this  jd  day  of 
December,  1897. 

In  the  presence  of        )  JOHN  E.  SMITH. 

fohn  Tones,  \ 

George  Wilson. }  [SEAL.] 

If  power  is  given  to  convey  lands,  the  same  regulations 
regarding  its  acknowledgment  by  husband  and  wife  are 
required  as  would  be  required  in  a  deed,  and  as  a  general  rule 
a  power  of  attorney  should  be  acknowledged  before  a  notary 
public. 

92.  Commercial  Agencies.  The  two  largest  commercial 
or  mercantile  agencies  in  this  country  are  Dun  &  Co.'s  and 
Bradstreet's.  These  firms  publish  reports  of  the  credit  or 
financial  standing  of  men  in  all  lines  of  business.  They  get 
their  information  from  their  agents,  who  are  located  in  all 
parts  of  the  country,  and  from  various  other  sources.  The 
service  has  been  so  much  improved  of  late  years  that  the 
information  which  they  furnish  is  of  great  assistance  to  the 
business  man  who  gives  credit  to  his  customers. 

Example :  Suppose  Mr.  John  Smith,  who  lives  in  Smithtown, 
should  order  a  bill  of  goods  from  some  firm  which  has  no  business 
acquaintance  with  Mr.  Smith  and  which  has  no  knowledge  of  his 
financial  standing.  It  would  be  quite  necessary  that  the  firm  of 
whom  he  ordered  the  goods  should  get  some  information  as  to 


136      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Mr.  Smith's  ability  to  pay,  before  giving  him  much  credit.  This 
information  they  may  get  from  Dun  &  Co.'s  or  Bradstreet's  com- 
mercial reports.  If  they  do  not  get  the  desired  information  from 
these  commercial  reports,  they  can  get  a  special  report  by  apply- 
ing for  it  at  the  offices  of  these  agencies. 

The  information  which  these  commercial  agencies  furnish 
is  obtained  by  their  agents,  from  individuals,  and  by  consult- 
ing the  tax  lists,  deed,  mortgage,  and  judgment  records,  etc., 
and  this  information  may  generally  be  relied  upon.  The 
expense  to  subscribers  is  small  in  comparison  with  the  bene- 
fit which  they  derive  from  the  reference  books  and  the  reports 
of  the  agencies.  If  a  business  man  in  any  part  of  the  country 
places  a  mortgage  upon  his  goods  or  becomes  bankrupt,  the 
subscribers  of  these  commercial  agencies  are  notified  by  the 
reports  which  the  agencies  publish. 

Form  CVI. 

INSIDE  COVER  OF  REFERENCE  BOOK 


This  book  is  tJie  property  of  the 
Commercial  Agency. 

It  is  loaned  to  subscribers  under  a 
certain  specific  agreement,  and  is  to 
be  returned  as  per  conditions  of  the 
agreement  under  which  it  is  loaned. 


COMMERCIAL  AGENCIES 


137 


Form  CVII. 

KEY 

The  omission  of  a  rating  is  not  intended  to  reflect  upon  a  party's  credit.    It 
simply  implies  that  we  have  not  the  information  upon  which  to  base  a  rating. 


f- 

9  •  •  m  n  •  Eb  W   we. 

«u  i  n 

1st 

2d 

3d 

$1,000,000  and 

above.    | 

500,000  to 

$1  ,000,  000  j 

Aa 

A 

B 

J 

400,000  to 

500,0001 

300,000  to 

400,000 

250  000  to 

300  000  I 

£ 



200,000  to 

250,000  i 

150,000  to 

200,  000  j 

100,000  to 

150,0001 

75,000  to 

100,000  1 

50,000  to 

75  000  1  " 

— 



—  D  — 

35,000  to 

50,  000  J 

20,000  to 

35,0001 

10  000  to 

20  000  1  - 

Q 

f 



5,000  to 

10  000  )' 

3,000  to 

5,0001 

2,000  to 

3,000  1-  -  - 

....D 

£• 

1,000  to 

2,OOOJ 

Y  

500  to 

1,000) 

0  to 

500  j 

GRADES    OF   CREDIT 


The  division  sign  (-T-)  indicates  more  than  one  business. 

93.  Reference  Books  of  Commercial  Agencies.  The  com- 
mercial agencies  publish  reference  books  quarterly,  in  January, 
March,  July,  and  September  of  each  year.  They  also  publish 
notification  sheets,  which  appear  more  frequently;  some  of 
them  weekly  and  some  monthly.  These  notification  sheets 


138      A  FIRST  BOOK  IN  BUSINESS  METHODS 

record  the  names  of  new  firms,  changes  in  old  ones,  fires, 
failures,  judgments,  etc. 

The  forms  below  will  show  how  the  pages  of  the  reference 
books  and  the  notification  sheets  are  made  up,  and  the  nature 
of  the  information : 

Form  CVIII. 
PART  OF  PAGE  OF  STATE  REFERENCE  BOOK 

KANSAS 


DRURY,  [S.  E.  C.]  Sumner. 

40 
On    Kansas  Southwestern  R.  R.  —  Pop.   11 

—  Tel.,  *,  Ex.  and  $  South    Haven,    5J^ 

miles. 

McDougall  Edward Gen.  Store   W   E 

Raypholtz  William M  iller    T     C 

DRYWOOD,  [S.  E.]  Crawford. 

40 

Six  and  one-half  miles  from  Pawnee  Sta- 
tion —  Pop.  12  —  Tel.  and  Ex.  Pawnee 
Station  —  *  Cato,  1%  miles  —  t  Arcadia, 

8  miles. 

Beebe  E.  C Blacksmith 

Coonrod  Bros Gen.  Store    X    D 

WashburnJ.E Grocer    Z     E 

DUBUQUE,  [C.]  Russell. 

40 
Eleven  miles  from  Dorrance  —  Pop.  20— Tel., 

*  and  Ex.  Dorrance  —  t  Wilson,  13  miles. 
WeberN Gen.  Store  -*•  S    C 

DUN,  [S.  E.]  Wilson. 

On  Kansas  Division  St.  Louis  &  San  Fran- 
cisco R.  R.  —  Pop.  38—  Tel-,  *,  Ex.  and  % 
Neodesha,  5  miles. 

AdellC.  S ....Gen.  Store 

Browning  V.  L Mill          E 

DUNAVANT,  [N.  E.  C.]  Jefferson. 

40 
On  Kansas  City  &  Northwestern  R.  R.—Pop. 

50-  Tel.  —  *- Pacific  Ex. -I  Winchester,  5 

miles. 

Becker  Charles Hardware,  &c    X    D 

Becker  Henry  &  Co ..Lumber    V    D 

Jacquemiu  C.  N.  &  Co Gen.  Store     T    C 

EDSON  [N.  W.]  Sherman. 

40 

On  Chicago,  Rock  Island  &  Pacific  R.  R.  — 
Pop.  15—  Tel.,  *,  Ex.  and  J  '  Ooodland, 

9  miles. 

Day  A Gen.  Store  W   D 


MISCELLANEOUS  139 


Form  CIX. 

PART  OF  A  NOTIFICATION  SHEET  SHOWING  CORRECTIONS  AND 

CHANGES 


MISSOURI 

Anabel— Overstreet  G.  W..G.  8.... .Sold  out 

Ash  Grove— Rose  &  Co..D.  G.  &c Cannon  &  Strader 

succeed 

Auxvasse— Adams  Bros.-G.  S A.  C.  Adams  deceased 

Boonville-Eppstein  &  Hain..G.  S Veit  Eppstein 


Carthage— Carp  H . .  D.  G.  &c Moved  to  Joplin 

Head&Baird..-Blksths Dissolved 

Cassville— MarbutT.  A..Gro Selling  out 

Clarksville-Nicklin  W.  P.  &  Co.. Drugs....  W.  P.  Nicklin 

succeeds 

Clinton— Wright- Austin  Candy  Co Dissolved 

Commerce -Ireland  A.  N..G.  S Sold  to  B.  C.  Moore 

Hannibal— Bowles  &  Tray  nor..  Clo.&c. .  J.  J.  Bowlessuc'ds 
Harrisonville— Frazier  J.  A.  .Gro  . .. . . Bill  of  sale  $350 

94.  Legal  Tender.  That  kind  of  money  which  has  been 
declared  by  law  to  be  suitable  to  offer  for  the  payment  of  a 
debt  is  called  legal  tender. 

Under  the  United  States  Statutes,  legal  tender  is  as  fol- 
lows :  Gold  coin  is  legal  tender  at  its  nominal  or  face  value 
for  all  debts,  public  and  private,  when  not  below  the  standard 
weight  and  limit  of  tolerance  prescribed  by  law;  and  when 
below  such  standard  and  limit  of  tolerance  it  is  legal  tender 
in  proportion  to  its  weight.  Standard  silver  dollars  are  legal 
tender  at  their  nominal  or  face  value  in  payment  of  all  debts, 
public  and  private,  except  where  otherwise  expressly  stipu- 
lated in  the  contract.  Subsidiary  silver  is  legal  tender  for 
amounts  not  exceeding  $10  in  any  one  payment.  The  minor 
coins  of  nickel  and  copper  are  legal  tender  to  the  extent 
of  25  cents.  Treasury  notes  of  the  act  of  July  14,  1890,  are 
legal  tender  for  all  debts,  public  and  private,  except  where 


140      A  FIRST  BOOK  IN  BUSINESS  METHODS 

otherwise  expressly  stipulated  in  the  contract.  United  States 
notes  are  legal  tender  for  all  debts,  public  and  private,  except 
duties  on  imports  and  interest  on  the  public  debt. 

Gold  certificates  and  silver  certificates  are  receivable  for  all 
public  dues.  National-bank  notes  are  receivable  for  all  public 
dues  except  duties  on  imports,  and  may  be  paid  out  by  the  Gov- 
ernment for  all  salaries  and  other  debts  and  demands  owing-  by 
the  United  States  to  individuals,  corporations,  and  associations 
within  the  United  States,  except  interest  on  the  ptiblic  debt  and  in 
redemption  of  the  national  currency. 

95.  How  to  Make  Change.    The  most  convenient  and 
accurate  way  to  make  change  is  by  addition. 

Example:  If  you  buy  something  that  costs  $3.37  and  in  pay- 
ment hand  the  salesman  a  five-dollar  bill,  he  would  not  subtract 
$3.37  from  $5.00  to  find  out  how  much  change  you  should  receive. 
He  would  first  get  3  cents  from  the  money  drawer  and  add  it  to 
the  amount  of  your  bill,  $3.37,  making  $3.40;  then  perhaps  he 
would  add  a  dime  to  the  $3.40,  making  $3.50;  then  50  cents, 
making  $4.00;  then  $1.00  more,  making  in  all  $5.00. 

The  salesman  does  not  know,  perhaps,  just  how  much 
change  he  gave  you,  nor  is  it  necessary  that  he  should  know,  if 
the  money  you  receive,  added  to  the  amount  of  your  purchase, 
equals  the  amount  of  the  bill  which  you  handed  to  him.  In 
counting  your  change,  add  just  as  the  salesman  did  and  you 
will  find  it  a  more  convenient  method  than  subtracting. 

96.  Marking  Goods.      Merchants  have  various  ways  for 
marking  goods  so  that  the  cost  price  may  be  known  to  the 
salesman  only.      Many  use  a  word  or  a  combination  of  words 
containing  ten  different  letters,  each  letter  representing  a 
single  figure. 


MISCELLANEOUS  141 

Example :     For  illustration,  let  us  take  the  word 

PURCHASING 
1234567890 
as  a  marking  key. 

Now  if  the  cost  of  an  article  be  $2.75  the  mark  would  be  USH 
and  if  the  cost  be  $3.50  the  mark  would  be  RHG. 

Sometimes  an  extra  letter  called  a  repeater  is  used  to  prevent 
repetition.  For  example,  we  will  use  X  for  the  repeater.  Now  if 
the  cost  of  an  article  be  $2.55,  instead  of  marking  it  UHH  the 
mark  would  be  UHX. 

Below  are  a  few  words  and  phrases  which  may  be  used  as 
marking  keys : 

Authorized  Previously 

Importance  Sent  by  mail 

Parchments  Cash  profit 

Now  be  quick  Hard  moneys 

97.    Suggestions  for  Pen-Lettering  and  Brush-Marking. 

Everyone  should  learn  how  to  mark  neatly  and  plainly,  with 
pen  or  brush,  packages,  boxes,  and  bulletins ;  and  this  is  some- 
thing which  may  be  so  easily  learned  that  any  person,  by  a 
little  practice,  can  do  the  work  as  well  as  the  copies  given 
on  page  142,  which  are  taken  from  actual  work. 

1 .  Care  should  be  taken  to  have  the  letters  slant  well  back 
to  the  left  and  to  have  the  heaviest  part  of  the  down  stroke 
come  just  on  the  line. 

2.  A  very  good  way  to  mark  packages  and  small  signs  is 
to  use  a  flexible  steel  pen.     Until  one  has  learned  the  forms 
of  the  letters,  a  pen  is  much  better  to  practice  with  than  a 
brush.     The  ability  to  make  a  nice  sign  comes  from  practice, 
but  by  practice  almost  anyone  may  learn  to  do  good  work. 

3.  If  a  brush  is  used,  get  a  good  one  of  red  sable,  with 


142      A  FIRST  BOOK  IN  BUSINESS  METHODS 


long  hair,  No.  6  or  8.     Then  get  a  can  of  Ivory  black  paint, 
Distemper  color  of  any  good  brand,  ground  in  water. 

4.  If  you  do  not  wish  to  expose  a  sign  to  the  rain,  water 
colors  are  much  better  than  oil,  for  they  are  cleaner  and 
cheaper,  and  the  brushes  and  hands  may  be  washed  clean, 
with  water,  in  a  moment. 

5.  Put  a  small  quantity  of  the  Ivory  black  in  a  separate 
cup  or  pot  and  thin  it  down  with  water  to  about  the  consist- 
ency of  writing  ink.    A  little  mucilage  should  be  added  to 

Form  CX. 


An  Alphabet  for  Brush-Marking' 

the  paint  to  prevent  it  from  rubbing  off,  and  if  you  wish  it  to 
dry  quickly,  add  a  little  alcohol. 

6.  Do  not  get  enough  paint  on  the  brush  so  that  it  will 
drip.     Get  some  old  pieces  of  paper  or  cardboard,  take  your 
brush  between  the  thumb  and  index  finger  and  you  are  ready 
to  begin. 

7.  The  hand  may  be  steadied  by  letting  the  little  finger 
rest  lightly  on  the  card  or  desk. 

By  following  these  suggestions  and  the  copies  given  above, 
any  one  may  soon  learn  to  make  a  good  plain  sign  or  to  mark 
a  box  or  package  very  well. 


MISCELLANEOUS  143 


QUESTIONS  AND  EXERCISES  ON  CHAPTER  VII. 

7.     What  is  a  petition  ? 

2.  Draw  up  a  petition  addressed  to  the  proper  authorities, 
asking  that  a  street  lamp  be  placed  on  the  corner  near  your 
house. 

j.  Write  a  petition  asking  that  a  night  watch  be  appointed 
for  that  part  of  the  city  in  which  you  live. 

4.  Mr.  Charles  Wood  wishes  to  be  appointed  postmaster 
of  the  town  in  which  he  lives,  and  he  asks  you  to  write  a 
petition  which  he  may  have  signed  by  his  friends  and  neigh- 
bors who  approve  of  his  appointment.     Write  his  petition. 

5.  Write  a  suitable  heading  for  a  subscription  paper  for 
raising  money  with  which  to  purchase  a  piano  for  the  public 
school  in  your  town. 

6.  Write  a  suitable  heading  for  a  subscription  paper  for 
the  purpose  of  raising  funds  for  defraying  the  expenses  of  an 
appropriate  celebration  on  the  Fourth  of  July  in  your  city. 

7.  What  is  a  power  of  attorney? 

8.  How  may  a  power  of  attorney  be  revoked  ? 

p.  Is  it  necessary  to  have  a  power  of  attorney  acknowl- 
edged before  a  notary  ?  Are  any  witnesses  required  ? 

10.  Could  a  mortgage  be  executed  by  a  power  of  attorney 
which  would  be  legal  ? 

77.  Name  two  of  the  leading  commercial  agencies  in  the 
United  States. 

12.     Of  what  use  are  these  agencies  to  business  men  ? 

7j.  May  the  information  which  they  furnish  be  relied 
upon? 

7^.  How  do  they  get  their  information  regarding  the 
business  standing  of  individuals  and  firms  doing  business  in 
various  parts  of  the  country  ? 


144     A  FIRST  BOOK  IN  BUSINESS  METHODS 


75.  Your  store,  No.  430  State  Street,  is  rented  to  J.  W. 
Simpson,  who  pays  you  $27.50  for  one  month's  rent.  Write 
a  receipt  for  the  amount  paid. 

16.  Write  a  due  bill  for  the  balance  of  your  account,  due 
S.  N.  Howe,  $25.65,  payable  in  goods  from  your  store. 

77.  Write  an  order  on  C.  H.  Groves  &  Co.,  dealers  in  cloth- 
ing, in  favor  of  your  hired  man,  William  Smith,  for  $28.25. 

1 8.  You  buy  a  horse  of  L.  W.  Rowley  for  $135  and  give 
him  your  note  at  sixty  days  in  payment.  Write  the  note, 
making  it  to  draw  interest  at  6  per  cent  from  date.  At  the 
end  of  the  sixty  days  you  figure  up  the  amount  due  and  give 
him  a  check  on  the  First  National  Bank  for  the  amount. 
Write  the  check,  making  it  payable  to  "order."  Ten  days 
after,  Mr.  Rowley  notifies  you  that  he  has  lost  the  check  and 
asks  you  to  give  him  a  duplicate  check.  Write  the  duplicate 
check. 

7p.  H.  W.  Peters,  who  lives  at  Manistee,  Mich.,  owes  you 
$145.35.  Draw  a  sight  draft  on  him  for  the  amount  and 
notify  him  that  you  have  drawn  on  him. 

20.  R.  B.  Thompson  buys  a  bill  of  goods  of  you  amount- 
ing to  $345.75  and  gives  you  in  payment  a  check  on  the  First 
National  Bank.     Write  the  check  and  ask  him  to  have  it 
certified.     Write  the  certification  in  its  proper  place  on  the 
check.    You  sell  the  check  to  Howe  &  Powers  and  indorse  it 
over  to  them.    Write  the  indorsement. 

21.  You  owe  Johnson  Bros.,  grocers,  Chicago,  $125.45,  and 
they  draw  a  draft  on  you  for  the  amount,  at  sight.     Accept 
the  draft  when  presented.   When  will  the  draft  be  due  ?   The 
exchange  on  the  draft  is  25  cents.    Write  a  check  on  the  City 
National  Bank  for  the  whole  amount  of  draft  and  exchange. 

22.  You  ship  to  D.  W.  Kingsley,  Michigan  City,  Ind., 
13,500  feet  of  lumber  at  $14.50  per  1,000  feet,  and  they  ask  for 


MISCELLANEOUS  145 


a  rebate  of  $15.00  on  account  of  the  poor  quality  of  some  of 
the  lumber.     Make  out  a  credit  memorandum  for  them. 

23.  You  ship  to  Packard  &  Jones,  Chicago,  to  be  sold  on 
commission : 

42  bbls.  Baldwin  apples. 

35       "      greenings. 

10      "     pears. 

Make  out  the  shipping  invoice. 

24..    You  ship  to  G.  H.  Woodham  &  Sons,  Toronto,  Canada 

23  bbls.  Baldwin  apples,  @  $3.25 

50      "      Wagner       "       @    3.00 

400  baskets  grapes,  @      .15 

What  invoices  and  other  papers  are  necessary  ? 

They  send  you  a  New  York  draft  in  payment,  and  by  mis- 
take they  have  the  initials  of  your  name  wrong.  How  can 
you  get  the  money  on  the  draft  ? 

GENERAL  REVIEW  EXERCISES 

/.  How  should  a  letter  be  addressed  to  the  President  of 
the  United  States  ? 

2.  How  should  a  letter  be  addressed  to  the  Lieutenant- 
Governor  of  your  state  ? 

j.  You  wish  to  write  a  letter  to  the  president  of  a  college. 
Show  how  the  heading  should  be  arranged,  including  the 
address  and  salutation,  and  the  proper  punctuation. 

4..  Show  how  a  billhead  should  be  arranged  for  a  quantity 
of  goods  which  you  sell  to  S.  R.  Woodbridge. 

5.  You  work  in  the  office  of  Culver  &  Smith  three  days 
and  two  hours  at  $2.25  per  day.     Make  out  your  bill  for  same. 

6.  J.  C.  Fillmore  owes  you  for  twelve  cords  of  wood  at 
10 


146      A  FIRST  BOOK  IN  BUSINESS  METHODS 

$2.20  per  cord.    Make  out  your  bill.    You  sell  the  account  to 
H.  M.  Powers.     Write  the  assignment  of  the  account. 

7,  You  send  a  shipment  of  goods  to  G.  W.  Haywood, 
Cedar  Rapids,  Iowa,  and  mail  him  an  invoice  of  same.    At 
the  expiration  of  ten  days  he  writes  you  that  no  invoice  has 
been  received.     What  should  you  do? 

8.  How  is  a  check  certified  ? 

p.    What  is  a  stub  of  a  check,  and  of  what  use  is  it  ? 

10.  If  a  person  holds  a  certificate  of  deposit  for  $100  on 
the  First  National  Bank  and  wishes  to  use  $50.00  of  the 
amount,  how  can  he  get  the  money? 

11.  What  is  the  difference  between  a  promissory  note  and 
a  bill  of  exchange  ? 

12.  When  may  commercial  paper  be  transferred  without 
any  indorsement? 

7j.  Is  there  any  difference  between  a  bank  draft  and  a 
domestic  bill  of  exchange  ? 

14..    What  is  a  post  office  money  order? 

75.  Are  post  office  money  orders  more  convenient  for 
making  remittances  than  bank  drafts? 

16.  Why  are  post  office  money  orders  used  in  some  cases 
in  preference  to  bank  drafts  ? 

77.  What  is  the  maximum  amount  for  post  office  money 
orders  ? 


CHAPTER  VIII. 

RAILROAD  AND  EXPRESS  BUSINESS 

98.  Shipping  Orders  and  Bills  of  Lading.  When  goods 
are  shipped  by  railroad  or  by  steamboat,  the  person  shipping 
the  goods,  who  is  called  the  consignor,  fills  out  a  skipping  order, 
which  is  a  written  statement  of  the  goods  shipped,  conditions 
of  shipment,  etc. 

Form  CXI. 


MICHIGAN  CENTRAL  RAILROAD  HOMPANY 


THIS  SHIPPING  ORDER  <*t»*l* •»«.••. »  UKMi  »*.• 


RECEIVE,  jubjtct  to  the  cU»£<»tion./^od  uria».io  .Sect  OD  the  <bu  of  I»IK  ol  ibis  Shipping  Ode, 


»_l«a  HI    •««.»»  C»«l£ 


M.arii.CM.1  »M»|  nmi 


J8 

I? 


»&P«CIALW 


Shipping  Order 
(147) 


148      A  FIRST  BOOK  IN  BUSINESS  METHODS 


FormCXII. 


MICHIGAN  HENTRAL  RAILROAD  COMPANY 

STRAIGHT  BILL  OF  LADING— ORIGINAL— NOT  NEGOTIABLE.     Sh"">"*  "" 


lES'H-SrS'H'l^H;^ 


Tbertteollrngbllrom. 


'  ••"•""'  JL'£°- 


Bill  of  Lading 


Form  CXI.  shows  how  a  railroad  shipping  order  should  be 
filled  out.  At  the  same  time  a  shipping  order  is  made,  a  bill 
of  lading  and  a  memorandum  of  same  are  also  made.  (See 
Forms  CXI.,  CXIL,  CXIII.)  The  shipping  order,  the  bill  of 
lading,  and  memorandum  are  much  alike,  but  the  heading  of 
each  is  different. 

The  shipping  order  is  signed  by  the  consignor  and  is  for 
the  use  of  the  railroad  agent.  The  bill  of  lading  is  signed 
by  the  railroad  agent  and  is  for  the  consignor,  it  being  his 


RAILROAD  AND  EXPRESS  BUSINESS 


149 


receipt  for  the  goods  which  he  has  left  with  the  railroad 
company  for  shipment.  As  a  rule  the  consignor  sends  his 
copy  of  the  bill  of  lading  to  the  consignee,  who  is  the  person 
to  whom  the  goods  are  shipped.  When  the  consignee  receives 
his  bill  of  lading  of  goods  shipped  to  him,  he  has  something 
to  show  that  the  goods  are  his  and  that  they  should  be 
delivered  to  him. 

The  memorandum  is  an  acknowledgment  that  a  bill  of 
lading  has  been  issued;  it  is  usually  retained  by  the  shipper 
and  filed  by  him  for  record. 

Form  CXIII. 


Form  of  Railroad  Memorandum 


99.  Railroad  Expense  Bills.  The  cost  for  freight  on 
goods  shipped  from  one  place  to  another  by  railroad  is 
not  paid  until  the  goods  reach  their  destination;  then  the 


150      A  FIRST  BOOK  IN  BUSINESS  METHODS 


railroad  agent  where  the  goods  are  delivered  to  the  consignee 
makes  out  what  is  called  an  expense  bill,  showing  all  the 
statement  of  transportation  charges.  Two  copies  of  this  bill 
are  made,  one  of  which  is  signed  by  the  consignee  to  show 
that  he  has  received  the  goods.  This  copy  the  railroad  agent 
keeps.  The  other  is  signed  by  the  railroad  agent  and  is 
retained  by  the  consignee  as  a  receipt  for  the  money  which 
he  paid  for  freight  on  the  goods. 

Form  CXIV.  shows  an  ordinary  railroad  expense  bill. 

Form  CXIV. 


FREIGHT  BILL 

CONSIGNEE 


DESTINATION- 


To  Chicago,  Burlington  &  Qumcy  Railway  £^7,  Dr. 


I         ^  -V    M-      V —  -         ' 
ARTICLES  AND  MARKS 


NO.  dr  PKOS 


RATE          FREIGHT        ADVANCES       TOTAL 


_____  ,          --     ____________  ,- 

'on,  V.I.AI  A>  O.MI.U  .w.  Original  Paid  Freight  Bills  should  accompany  all  Claims  tor  Overcharge,  Los*  or  Damage 


Form  of  Railroad  Expense  Bill  or  Freight  Bill 

loo.    Manifest  of  Articles  Exported  from  the  United  States. 

When  goods  are  shipped  by  railway  for  exportation  from 
the  United  States  to  any  foreign  country,  it  is  necessary  for 


RAILROAD  AND  EXPRESS  BUSINESS 


the  shipper  to  make  out  what  is  called  a  manifest,  which 
he  delivers  to  the  freight  agent  with  the  regular  shipping 
receipt.  Blank  manifests  may  be  obtained  from  any  railroad 
company. 

The  manifest  is  a  statement  showing  what  goods  are 
shipped,  and  their  value,  and  it  is  for  the  use  of  the  custom 
house  officers.  (See  Form  CXV.) 

When  goods  are  shipped  by  express  for  export,  the  shipper 
delivers  to  the  express  agent  a  copy  of  the  invoice,  showing 
the  kind  and  value  of  the  goods  shipped,  and  to  this  the 
manifest  is  attached. 


Form  CXV. 


MICHIGAN 


OWNER'S  OR  AGENT'S  MANIFEST  OF  ARTICLES  EXPORTED  BY  RAILWAY 


•  List  or  manifest  of  articjeffof  comestic  production  or  manufacture,  and  of  for 

J>n.M.r  rf.rlh,p*j.fyf          ^^^t^V^^^^^^^^J^f-f^^-.^  ,„,.    ,       tO  the 

eign  articles,  free  of  duty  or  duty 
MICHIGAN  CENTRAL  RAILROAD  COMPANY, 

for  cxpirtatiarStn    <^#r<™J&        (glU^/^                             ,/a             ^f^^^ 

Hut,o...K.4.ad»M«i,^,.lo«l,.o,..u,.                                                              <l«.^luir.ni.U.V.S..b«.U.»Udu»Ub<.fanl(.cc».U7 

MASITfl  ABB  OTKIEBS  OF  t  AOKAOa 

DESCBIPTIOH  OF  ABTIOLE9. 

DOMESTIO  AfiTIOLES. 

rinffl  inicla  rra  of  Wtr  or  tuiy  r.,1 

QautHia. 

Vilna. 

^*BSfe^ 

Vilua 

/5L«»~  ;<&>  -   <&» 

^^^,  &<«Z&t& 

;                  . 

!^r*2 

^^s~^&^J?. 

**«*»  certify  that  tht  atovt  U  a  full  anJLtrue  ttatement  of  the  kindi.  Quantities  and 


valuet.  and  destination  of  all  Uu>\article>  delivered  by  m»  /«•  exportation  a,  af 


A  Railroad  Manifest 


152      A  FIRST  BOOK  IN  BUSINESS  METHODS 


101.  Sending  Goods  by  Express.  When  goods  are  shipped 
by  express  the  package  should  be  plainly  marked,  not  only 
with  the  name  and  address  of  the  person  to  whom  the  goods 
are  shipped,  but  also  with  the  name  and  address  of  the  shipper. 
Observance  of  this  rule  would  save  much  trouble  and  annoy- 
ance to  those  who  receive  many  packages  by  express,  for  it  fre- 
quently occurs  that  the  consignee  is  unable  to  determine  who 
is  the  rightful  owner  of  packages  which  come  to  him,  even 
if  he  receives  a  letter  stating  that  a  package  has  been  sent. 

Express  agents  will  always  give  a  receipt  for  the  packages 
taken  into  their  charge  if  requested  to  do  so,  and  the  shipper 
should  always  get  such  a  receipt,  for  it  may  be  of  particular 
value  if  a  package  should  be  damaged,  delayed,  or  lost  on  the 
way.  Express  companies  are  always  responsible  for  losses 
caused  by  carelessness  of  their  agents.  The  sender  should 
place  his  name  on  the  outside  of  the  express  package ;  then  if 
the  person  for  whom  the  goods  are  intended  cannot  be  found, 
the  express  company  will  promptly  notify  the  sender. 

The  receiver  of  an  express  parcel  is  obliged  to  sign  a 
receipt  when  he  takes  the  parcel  from  the  express  company's 
agent.  If  any  other  person  than  the  one  addressed  receives 
the  package,  he  should  first  sign  the  name  of  the  proper 
consignee,  and  just  below  that,  his  own  name. 

If  the  goods  are  perishable  articles,  like  fruit  or  flowers, 
the  package  should  be  marked  "  Perishable,"  so  as  to  show 
the  need  of  haste  in  forwarding ;  and  if  the  package  contains 
glass  or  articles  which  may  be  easily  broken,  it  should  be 
marked  " Glass"  or  " Handle  with  Care." 

Generally  the  charges  may  be  prepaid  or  not,  as  .the  sender 
prefers.  *  Charges  vary  according  to  the  character,  weight,  and 
value  of  the  goods  sent  and  the  distance  traveled,  the  state- 
ment of  the  sender  as  to  the  value  being  accepted. 


RAILROAD  AND  EXPRESS  BUSINESS          153 


102.  Collections  by  Express  Companies.  Nearly  all  of 
the  express  companies  now  have  arrangements  by  which  they 
undertake  the  collection  of  accounts  or  notes,  at  any  place  on 
their  line  where  they  have  an  agent.  The  expense  of  collec- 
tion in  this  way  is  small,  and  the  collections  are  attended  to 
promptly.  If  the  collection  cannot  be  made,  notice  will  be 
given  promptly,  with  reasons  for  refusal. 

Form  CXVI. 


ADAMS  EXPRESS  COMPANY. 


SPECIAL  IM8TRUCTIOHS.  REMARKS: 


^4«  Adams  Express  Special  Collection  Envelope 

When  a  collection  is  to  be  made  by  an  express  company 
a  statement  of  the  account  should  be  made  and  placed  in  a 
special  collection  envelope,  as  shown  by  the  form  above;  this 
envelope  containing  the  statement  of  the  account  is  then 
handed  to  the  express  agent.  A  small  fee  is  charged  by  the 
express  company  for  undertaking  the  collection,  and  if  the 
collection  cannot  be  made,  there  are  no  further  charges,  but 
if  they  make  the  collection,  a  small  additional  fee  is  charged 
for  return  of  the  money.  The  whole  expense  for  collecting 
an  account  of  $12.00  or  $15.00  by  this  method  is  not  more  than 
20  or  25  cents. 


154     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXVII. 


164) 


No.. 


for  Collection. 

Charges  for  Return  of  Money. 
.Total  Amount  to  be  returned,. 


From 


Rock  Island,  III., 


Bill  to  be  collected  on  delivery  of  goods. 

Goods  billed  to 


NOTICE  TO  SHIPPERS. 


ems.  If  the  m.>r.ey-tt>  bc-collecied  from  the  consienee  ornialivery 
of  ihe  property  described  beretu  fs  not  paid  wiihHi  thirty  dayslrom  date  of  this 
Company  s  receipt,  the  shipper  aprees  that  this  Company  may  return  said 
property  to  fcim  at  the  -exniration  of  that  time  subject  to  the  conditions  of 
this  Company's  receipt,  that  he -will  pay  ihe  charges  for  transportation  both 
ways  and  ihat  ihe  liability  of  this  Company,  for  suc"j  property,  -while  rn 
its  pnmexxian,  for  the  purpose  of  making  such  collection,  shall  be  thai  of 

NOTICE  TO  AGENTS. 

Agents  and  all  employes  concerned  are  referred  to  the  Company's  Book  of 
Rules  and  Instructions  concerning  C.  O.  D.'s  and  will  be  held  to  strict  account* 
ability  for  compliance  therewith. -.. 

REMARKS. 


Counted  and  Seated  by 


A  United  States  Express  C.  O.  D.  Envelope 


RAILROAD  AND  EXPRESS  BUSINESS          155 


103.  Sending  Goods  C.  O.  D.  by  Express.     If  goods  are 
sent  C.  O.  D.  (Collect  on  Delivery),  which  means  that  they  are 
to  be  paid  for  when  delivered,  the  sender  makes  out  a  bill  of 
the  goods  and  places  it  in  an  envelope  called  a  C.  O.  D.  envel- 
ope, which  he  sends  with  the  goods.     When  the  goods  are 
delivered  by  the  express  company  to  the  person  to  whom 
they  are  addressed,  it  collects  the  charges  for  delivering  the 
goods  and  also  the  amount  of  the  bill.     Sometimes,  too,  they 
collect  charges  for  the  return  of  the  money  to  the  shipper. 
If  the  charges  for  the  return  of  the  money  are  to  be  col- 
lected, the  amount  of  the  charges  should  be  shown  on  the 
C.  O.  D.  envelope. 

The  bill  which  the  sender  makes  out  to  be  sent  with  the 
goods  should  be  receipted,  for  the  expressman  will  not  deliver 
the  goods  to  the  purchaser  until  the  C.  O.  D.  bill  has  been 
paid. 

Form  CXVII.  shows  a  return  C.  O.  D.  envelope  properly 
filled  out. 

104.  Bill  of  Lading  with   Draft  Attached.     Sometimes 
when  a  man  who  does  not  have  very  high  credit  in  the  com- 
mercial world,  orders  a  bill  of  goods  from  a  wholesale  firm, 
they  have  some  hesitation  in  shipping  the  goods  without 
being  assured  that  prompt  payment  will  be  made.     If  the 
goods  to  be  shipped  are  too  heavy  to  go  by  express,  they 
may  be  shipped  C.  O.  D.  by  freight.     This  is  usually  done 
by  means  of  a  bill  of  lading  with  draft  attached.     The  ship- 
per bills  the  goods  to  himself  at  the  place  where  the  pur- 
chaser lives.     He  does  not,  however,  send  the  bill  of  lading 
direct  to  the  purchaser  of  the  goods,  but  draws  a  draft  on 
him  to  which   the   B/L  is  attached,  and  the  draft  is  sent 
through  the  bank  to  him  for  collection.     Before  'the  B/L  is 


156      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXVIII. 


The  Lake  Shore  &  Michigan  Southern  Railway  Company 

STRAIGHT  BILL  OF  LADING— ORIGINAL— NOT  NEGOTIABLE      **"*""" 


/?«'//  £>/  Lading  to  which  Draft  is  attached 


sent,  it  is  indorsed  to  him,  and  when  he  has  paid  the  draft  the 
B/L  is  turned  over  to  him  and  he  can  get  the  goods. 

Example  :  Suppose  Marshall  Field  &  Co.  of  Chicago  receive 
an  order  for  a  bill  of  goods  amounting  to  $450  from  H  E.  Mason 
&  Co.  of  Coldwater,  Mich.,  with  a  request  that  the  goods  be 
shipped  by  freight.  If  they  desire  to  ship  the  goods  C.  O.  D. 
or  with  B/L  attached  to  draft,  the  B/L  would  be  like  Form 
CXVIII.,  Marshall  Field  &  Co.  appearing  as  the  consignees.  The 


RAILROAD  AND  EXPRESS  BUSINESS 


157 


indorsement  on  the  B/L  is  an  order  to  the  railroad  freight  agent 
at  Coldwater  to  deliver  the  goods  to  H.  E.  Mason  &  Co.  A  draft 
on  H.  E.  Mason  &  Co.,  with  B/L  attached,  is  sent  to  the  bank  at 
Coldwater,  with  instructions  to  deliver  the  B/L  to  H.  E.  Mason  & 
Co.  when  the  draft  is  paid.  (See  Form  CXIX.) 

A  bill  of  the  goods  is  also  sent  to  H.  E.  Mason  &  Co.  with  a 
letter  advising  them  how  the  goods  were  shipped. 

Form  CXIX. 

CHICAGO,  ILL.,  Nov.  19,  1899. 
CASHIER  NATIONAL  BANK, 

Coldwater,  Mich. 

DEAR  SIR  :  —  Inclosed  herewith  we  mail  you  draft  attached  to 
B/L  and  drawn  on  H.  E.  Mason  &  Co.  of  your  city  for  $450. 
Please  collect  of  H.  E.  Mason  &  Co.  the  amount  of  the  draft,  and 
when  same  is  paid  deliver  to  them  the  B/L.  Send  proceeds  to 
us,  less  collection  and  exchange,  and  oblige, 

Yours  truly, 

MARSHALL  FIELD  &  Co. 


Draft  to  be  attached  to  above  Bill  of  Lading 

This  method  is  used  only  in  cases  where  the  consignee 
does  not  have  good  business  credit,  and  it  is  unsafe  to  ship 


158      A  FIRST  BOOK  IN  BUSINESS  METHODS 


him  goods  in  any  other  way.  The  consignee  should  under- 
stand before  the  goods  are  shipped  that  they  must  be  paid 
for  when  delivered,  for  if  he  refuses  them,  the  shipper  must 
pay  the  freight. 

105.  Shipping  Invoice.  When  goods  are  shipped  away 
to  be  sold  on  commission,  an  invoice  should  be  made  out 
showing  the  amount  and  kind  of  goods  shipped.  The  goods 

Form  CXX. 

SHIPPING  INVOICE 


Form  Z 

INVOICE 

and  consi 
to  be  sold 

SHIPPING   INVOICE. 

J50  >  W9_ 

GALESBURG,  MICH.  ,  _  .?_?...__*  ... 

OF  MERCHANDISE  shipped  by    JamesW-    Miller, 

Buck  &  Co.  ,   nf  Chicago,    111.  , 

gned  to  °".  :?.  .:.  -  :_ 
on  commission. 

120  bbls.  Baldwin  Apples 

84       »      Bartlett  Pears 

— 

— 

— 

— 

should  be  plainly  marked,  not  only  with  the  name  and 
address  of  the  person  to  whom  they  are  shipped,  but  with  the 
name  of  the  shipper  also,  so  that  the  commission  merchant 
can  see  at  a  glance  whose  goods  they  are. 

NOTE. —  For  laws  in  regard  to  Common  Carriers,  see  §120. 


RAILROAD  AND  EXPRESS  BUSINESS          159 


QUESTIONS  AND  EXERCISES  ON  CHAPTER  VIII. 

7.     What  is  a  bill  of  lading  ? 

2.  How  many  copies  of  the  bill  ^f  lading  are  usually 
made? 

j.  Who  fills  out  the  bill  of  lading,  the  person  who  ships 
the  goods  or  the  railroad  agent  ? 

^.     Which  party  is  the  consignee  ?    Which  the  consignor  ? 

5.  Does  the  consignor  send  his  copy  of  the  railroad  bill 
of  lading  to  the  consignee  or  retain  it  himself  ? 

6.  You  wish  to  send  four  barrels  of  choice  winter  apples 
to  John  W.  Horton  &  Co.,  commission  merchants,  Detroit, 
Mich.    Make  out  the  shipping  receipt  and  sign  your  copy. 

7.  What  is  a  railroad  expense  bill  ? 

8.  Who  makes  out  the  railroad  expense  bill,  the  railroad 
agent  or  the  consignee  ?    How  many  copies  are  usually  made  ? 

p.  Of  what  use  is  it  to  the  consignee  to  have  the  railroad 
agent  sign  his  copy  of  the  railroad  expense  bill  ? 

10.  Of  what  use  to  the  railroad  agent  is  the  signature  of 
the'  consignee  on  a  railroad  bill  of  lading  ? 

n.    What  is  a  railroad  manifest  ? 

12.  When  is  it  necessary  to  furnish  a  manifest  to  the  rail- 
road agent  ? 

13.  Who  fills  out  the  manifest  ? 

14.  In  shipping  goods  to  Canada  from  the  United  States, 
what  is  required  besides  the  usual  invoice  ?    Of  what  use  is  a 
certified  invoice  ? 

75.  What  is  the  object  in  getting  a  receipt  from  the 
express  agent  when  sending  goods  by  express  ? 

16.    Is  it  usually  necessary  to  prepay  express  charges  ? 

77.  George  W.  Whitney  of  Centerville,  Ind.,  orders  of  you 
fifteen  bushels  of  Crawford  peaches  at  $1.25  per  bushel,  and 


160     A  FIRST  BOOK  IN  BUSINESS  METHODS 


asks  you  to  send  them  by  express,  C.  O.  D.  Make  out  all  nec- 
essary papers  for  sending  the  peaches  as  requested. 

18.  Morton  &  Goodyear  of  Indianapolis,  Ind.,  order  of  you 
100  bushels  of  Crawford  peaches,  and  ask  you  to  draw  on  them 
for  the  amount  of  same,  with  bill  of  lading  attached  to  draft. 
Write  all  necessary  papers  and  notify  them  that  the  peaches 
have  been  shipped. 

/p0  If  you  receive  by  express  a  package  addressed  to 
your  friend,  what  name  would  you  sign  to  the  receipt  ? 

20.  Is  a  bill  for  goods  sent  C.  O.  D.  by  express  different 
from  any  other  bill  of  goods  ? 

21.  Who  usually  pays  the  return  charges  on  the  money 
received  from  a  C.  O.  D.  bill  ? 

22.  Explain  how  goods  are  sent  C.  O.  D.  by  freight. 

23.  What  is  the  object  in  attaching  a  draft  to  a  bill  of 
lading  ? 

24..  You  receive  an  order  from  John  W.  Williams,  Indian- 
apolis, Ind.,  for  a  bill  of  merchandise  amounting  to  $260.40. 
Wishing  to  be  sure  of  your  pay,  you  draw  a  draft  on  him  and 
attach  it  to  the  bill  of  lading.  Write  the  draft.  Make  out 
the  bill  of  lading.  Write  a  letter  to  him,  notifying  him  of 
the  shipment,  and  that  you  have  drawn  on  him. 

25.  When  produce  is  shipped  away  to  be  sold  on  commis- 
sion, is  it  necessary  to  send  a  shipping  invoice  ? 

26.  You  have  340  dozen  eggs  and  125  pounds  of  butter  to 
ship  to  J.  W.  Emery,  commission  merchant,  Chicago,  to  sell 
on  commission.     Make  out  a  shipping  bill ;  also  write  him  a 
letter  telling  him  not  to  sell  the  butter  at  less  than  22  cents 
per  pound.     When  the  produce  is  shipped  you  should  of 
course  get  a  shipping  receipt  or  railroad  bill  of  lading  from 
the  railroad  company.     Do   you  hold  the  shipping  receipt 
or  do  you  send  it  to  the  man  to  whom  you  ship  the  goods? 


RAILROAD  AND  EXPRESS  BUSINESS        161 


<?/.  Suppose  you  wish  to  send  a  cook  stove  weighing 
350  pounds  from  La  Grange,  Ind.,  to  Niles,  Mich  Make  out 
the  proper  shipping  bill.  You  ship  the  stove  and  it  is  badly 
damaged  by  carelessness  in  handling.  Write  a  letter  to  the 
railroad  company  claiming  damage  on  the  stove  amounting 
to  $10.00. 

GENERAL  REVIEW  EXERCISES 

7.  What  is  the  difference  between  a  check  and  a  bank 
draft? 

2.    What  are  safety  deposit  vaults? 
j.    What  is  a  bank  draft  ? 

4.  What  is  meant  by  protesting  a  draft? 

5.  What  is  a  collateral  note  ? 

6.  If  you  hold  a  note  against  a  man  living  in  a  distant 
city,  how  would  you  proceed  to  collect  it  ? 

7.  What  is  meant  by  partial  payments? 

8.  A  man  living  in  Milwaukee,  Wis.,  wishes  to  pay  a  bill 
in  St.  Louis,  Mo.    Which  would  be  better,  to  send  a  New  York 
draft  or  a  Chicago  draft  ? 

p.  Would  it  make  any  difference  to  the  payee  if  he  lived 
in  Richmond,  Va.,  whether  he  received  a  New  York  draft  or 
a  Chicago  draft  ? 

10.  What  other  methods  are  there  for  making  remittances 
besides  bank  drafts  and  post  office  money  orders  ? 

n.    What  are  travelers'  checks  ? 

12.     By  whom  are  they  issued  ? 

7j.     What  is  meant  by  "  proxy  "  ? 

14.  Explain  how  an  individual  or  firm  may  give  to  an 
agent  authority  to  execute  a  deed  or  a  mortgage. 

75.     When  such  authority  has  been  properly  given,  how 
may  it  be  terminated? 
11 


CHAPTER  IX. 


CONTRACTS,  LEASES,  GUARANTIES,  BONDS 

1 06.  Contracts.  A  contract  is  an  agreement  between  two 
or  more  persons  to  do  or  not  to  do  certain  stated  things. 
Contracts  are  of  so  much  importance  that  it  will  be  well  to 
consider  some  of  the  things  necessary  to  their  validity. 

1.  The  thing  to  be  done  must  be  possible.    This  does  not 
mean  that  a  person  may  make  a  contract  and  afterward  be 
relieved  from  performing  it  because  of  a  lack  of  money,  or 
sickness,  or  something  which  makes  it  impossible  for  him  to 
fulfill  his  agreement;  but  if  the  thing  agreed  to  be  done  is 
something  which,  in  its  nature,  is  impossible,  the  law  will 
not  hold  the  maker  of  the  contract  responsible  for  its  per- 
formance. 

2.  Any  contract  which  the  law  forbids  is  not  binding.     A 
contract  for  smuggling  goods  would  not  be  valid;  neither 
would  a  contract  for  robbery  or  bribery  be  valid,  for  the  law 
will  not  compel  a  man  to  do  that  which  it  forbids  him  to  do. 

3.  Any  contract  which  by  its  performance  is  injurious  to 
the  public  is  not  valid. 

4.  Contracts  made  on  Sunday  are  not  valid  in  some  states. 

5.  The  parties  to  the  contract  must  be  competent  to  make 
a  contract  or  it  will  not  be  valid.     A  contract  with  a  drunken 


CONTRACTS  163 


person  is  not  binding  upon  him,  neither  is  one  made  by  an 
idiot,  or  an  insane  person,  or  a  minor,  unless  the  contract  is 
for  necessaries,  such  as  food,  clothing,  shelter,  or  education. 
6.  Before  a  contract  can  be  binding  upon  either  party, 
there  must  be  a  mutual  understanding  between  them.  There 
is  a  popular  saying  that  it  takes  two  to  make  a  bargain, 
and  that  is  true.  If  it  can  be  proved  that  there  was  any  mis- 
understanding on  either  side  in  regard  to  the  essential  parts 
of  the  contract,  there  is  no  agreement,  and  the  contract  is 
voidable. 

107.  Valid  Consideration.    In  order  that  the  contract  be 
binding,  there  must  be  some  consideration.    If  I  tell  you  that 
I  will  give  you  a  new  suit  of  clothes,  and  afterward  refuse  to 
do  so,  the  law  will  not  "compel  me  to  make  you  a  present  of  a 
new  suit  of  clothes,  because  there  was  no  consideration.     If, 
however,  you  had  agreed  to  work  for  me  a  couple  of  days  and 
I  had  agreed  to  supply  you  with  a  new  suit  of  clothes  in  pay- 
ment, the  contract  would  then  be  binding,  for  there  would  be 
a  mutual  understanding  between  us,  and  there  would  also  be 
some  recompense  or  consideration  for  the  clothes.    If  I  should 
make  you  a  present  of  the  suit  of  clothes,  I  could  not  compel 
you  to  give  them  back  to  me. 

108.  Written    Contracts.     There    are    certain    contracts 
which  must  be  in  writing  in  order  to  be  binding. 

1.  Any  contract  for  the  sale  of  real  estate  must  be  in  writ- 
ing, and  any  contract  which  is  not  to  be  performed  within  a 
year  must  be  in  writing  to  be  binding. 

2.  A  lease  for  more  than  one  year  would  not  be  binding 
unless  the  contract  or  agreement  were  in  writing. 

3.  Every  contract  to  answer  for  the  debts  of  another  must 


164      A  FIRST  BOOK  IN  BUSINESS  METHODS 


be  in  writing  to  be  binding.  If  a  man  goes  into  a  store  and 
buys  a  pair  of  shoes  on  credit,  and  his  friend  says  to  the 
merchant,  "  If  this  man  does  not  pay  for  the  shoes,  I  will," 
the  merchant  could  not  hold  the  friend  responsible  for  the 
payment  unless  the  agreement  was  in  writing. 

4.  In  some  states  all  contracts  for  the  sale  of  goods 
amounting  to  more  than  $50.00  must  be  in  writing  in  order 
to  be  binding,  unless  part  of  the  purchase  price  is  paid  at  the 
time  the  contract  is  made,  or  unless  part  of  the  goods  have 
been  delivered.  The  part  payment  is  sometimes  called  earnest 
money  and  does  away  with  the  necessity  of  having  the  contract 
in  writing. 

109.  Verbal  Contracts  Unsafe.  If  the  parties  to  a  con- 
tract place  their  agreement  in  writing,  it  must  be  wholly  in 
writing.  It  cannot  be  partly  written  and  partly  verbal,  for  the 
law  will  recognize  only  the  written  agreement. 

There  are  many  important  contracts  which  are  not  required 
by  law  to  be  in  writing,  but  it  is  better  in  most  cases  if  the 
parties  to  a  contract  have  their  agreement  placed  in  writing 
and  each  person  interested  furnished  with  a  copy.  People  who 
rely  on  a  verbal  contract  are  apt  to  forget  just  what  the  agree- 
ment was,  and  many  times  there  are  misunderstandings  and 
dissatisfactions  which  might  have  been  avoided  if  the  agree- 
ment had  been  placed  in  writing.  Very  often  this  important 
matter  is  neglected  because  the  person  with  whom  the  con- 
tract is  made  is  a  relative  or  friend,  and  it  is  thought  that 
there  is  no  need  of  a  written  contract  with  a  person  in  whom 
one  has  implicit  confidence.  The  fact  that  the  parties  to  a 
contract  are  intimate  friends  is,  however,  a  greater  reason 
why  their  contract  should  be  in  writing,  so  that  no  misunder- 
standings may  arise  to  break  their  friendship. 


CONTRACTS  165 


no.  Formal  Articles  Not  Necessary.  It  is  not  necessary, 
even  in  matters  of  great  importance,  to  draw  up  articles  of 
agreement  with  great  formality,  and  the  law  which  requires 
certain  contracts  to  be  in  writing  does  not  state  what  shape 
the  writing  shall  .assume.  It  is  not  a  difficult  matter  to  pre- 
pare ordinary  articles  of  agreement,  if  one  understands  what 
the  agreement  is  and  will  express  that  agreement  in  plain, 
simple  language,  being  careful  to  state  precisely  and  fully 
just  what  is  meant. 

Persons  who  are  not  lawyers  should  use  as  simple  language 
as  possible,  and  avoid  the  use  of  legal  terms  which  they  do 
not  understand. 

It  is  not  necessary  that  a  contract  be  sealed  or  witnessed. 
Contracts  are  usually  drawn  similar  to  the  form  given  below : 

Form  CXXI. 

CONTRACT  TO  PERFORM  WORK 

This  agreement  made  this  fourth  day  of  March,  A.  D.  1901, 
between  John  W.  Thompson  of  the  city  of  Springfield,  State  of 
Missouri,  and  Robert  P.  Smith  of  the  same  place,  witnesseth: 
That  the  said  John  W.  Thompson  agrees  to  work  for  the  said 
Robert  P.  Smith  as  a  farm  hand,  on  the  farm  of  the  said  Robert 
P.  Smith,  near  the  city  of  Springfield,  during  a  period  of  eight 
months,  beginning  March  15,  1901,  and  ending  November  14,  1901. 

In  consideration  of  the  services  so  performed,  the  said  Robert 
P.  Smith  agrees  to  pay  to  the  said  John  W.  Thompson  the  sum 
of  Twenty  Dollars  per  month,  to  be  paid  at  the  end  of  each  month 
of  said  term. 

In  witness  whereof,  we  have  hereunto  set  our  hands  and  seals 
the  day  and  year  first  above  written. 

Witnesses  :  ,  ^ —  . 

T.  D.  FULLER.  JOHN  W.  THOMPSON.  •!   L.  s.   {• 

O.  W.  JONES.  (  —  > 

ROBERT  P.  SMITH. 


1 66     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXXII. 


Hgreement,  **.  *. 


CCUtr.eSaCtb,  Tku  the  laid    party    o<   die  £nt  put^ha^— agreed  to   let,  and   hereby   eV.  t*    Wt  to  the  said  pana     of 
the   second    part,    amd    the   said  f^ft— of   the    second    put    n.  •«     agreed    to    take,    and    hereby   do  M    nVr    from    Ike   asU 


i--*  ->  ,h.  6n> 
&-fc 


p»rtfa  —  of  t 


venint^labil    yv^t^^  -  will  not  u»igc  thu  leaje.  Mr  k«, 


undeilet  -Jit  whole  or  in;  part  ol  die  uid  premltn,  not  make  .1,7   .Itention   theryf,   witkoul  die  wriuen  cociser.!  of  the   uid 
ol  forleiiore  ud  danuga;    «nd  UUt-.^L*-/  _  wili  not  occgpj  or  B.r  the  uid 


E  first  part,  under  the  penalty 

,  nor  permit  the  ,a=«  to  be  occupied  or  used  for  ar,,  bu. 
without  the  like  consent,  under  the  like  penalty. 

HnO    The^aid  p«r,y_of  d»K«<»d   p«    funhe,    coven. 

first  part,  or A4** 'gent,  to  show  the  premises  to  per 

of  February  tiert  preceding  the  expiration  of  tie  lerm.  wi-'      .rmi 


.ill   permit   me  laid   partj^—  «f  the 


HnO  a(50,  Tb*t  )l  the  said  premises,  or  any  part  thereof,  shall  become   vacant  -during   die  said  term,  the  Mid  psitj/  .of 
—represenuliye,  may  re-enter    die  same,   either  by  force  or  otherwise,  without  being  Cble 


Hn6  The  said  pma  of  I 
.aid  rent,  o,  ,.,  j-r,  dtereof.  a,  ,h 
•greements  herein  contained,  die  said  hiring,  and  the  relation  of  landlord  and  tenant,  at  die  option  of  die  laid  paru-^of  tie 


tnd  Ike  aud  put^L-of  the  aecond  put  hereby  e»pre»I, 
f  n  OTltne08  TOUeteOt   The  pmia  to  tte«  preso-u  h.,, 


Form  of  Lease  (front) 


LEASES 


Form  CXXIII. 


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•a  tbe  expreaa  condition,  however,  that  the  aaiignor  ihtll  remain  liable  for  the  prompt  payment  of  the  rent  and  performance 
of  the  covenanta  on  the  part  of  the  second  party  ei  therein  mentioned,  and  that  no  further  assignment  of  .aid  Leau  or  anb. 

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af  »me  and  agree  to  male  all  the  pavmehta  and  perform  all  the  coyenanta  and  condition]  of  the  within  Lease,  bj  laid  party  ol 
the  .eeond  part  to  be  made  and  performed. 

For  »aToe  nctntl  tierebt  aaalgn  all  right,  title  and  inlereel  In  and  to  the  within  Lease  nnto 
—  -  -  .  heir,  and  aeaigna.  and  in  consideration 

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Form  of  Lease  (back) 


i68      A  FIRST  BOOK  IN  BUSINESS  METHODS 


in.  Leases.  A  contract  made  between  two  parties,  by 
which  real  estate  is  rented  for  a  specified  time,  is  called  a 
lease.  A  person  who  leases  real  estate  to  another  is  called  a 

Form  CXXIV. 

LANDLORD'S  FIVE  DAY  NOTICE.- FOB  CNICAQ9.      FORM  No.  238. 


Cents,  being  rent  for  the  premises  situated  in  the  City  of  Chicago. 


in  Gtftk  County,  in  the  State  of  Illinois,  and  knnum  and  described  as.  follows,  viz. : 


tt  At  C        Uf     CT        otlC,    That  payment  of  said  sum  so  due  has  been  ana 
is    hereby   demandaA    of    you,  and    that    unless    payment   thereof  is   made  on.  or  before  the 

D  190_2^your  lease  of  said 
hereby  authorised  to 


s      erey      emana      o      you,  an          a     uness    paymen 
____  .........  /...A..  .......  S^L  .....  _.  ............  ____  day.  of  ____  ^2^^^  _____ 


premises  will  be  terminated. 
receive  said  rent  so  due. 
this. 


Notice  to  Quit  (front)  — (Used  in  Illinois) 

landlord,  and  the  person  to  whom  he  leases  the  real  estate  is 
called  a  tenant.  In  law,  the  person  giving  the  lease  is  termed 
the  lessor •,  and  the  person  to  whom  the  lease  is  made  is  termed 
the  lessee. 

A  verbal  lease  for  more  than  one  year  is  void;  therefore, 


LEASES 


169 


when  a  promise  to  rent  for  more  than  a  year  is  made,  it 
should  be  in  writing.     No   particular   form  of  wording  is 


Form  CXXV. 


<B» 

Hre  Bay  Notice* 

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Served,  tho  within  notice  ly  delivering  a 

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copy  thereof  to  tho  within  named-  

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this  -  -day  of 

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A.D.  J00_  

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Mileage.    •              ...   £__  

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Service,    •    $  —  

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Notice  to  Quit  (back) 

necessary,  but  it  is  important  that  the  lease  state  in  a  plain, 
straightforward  manner,  all  the  conditions  of  the  agreement, 
so  that  there  may  be  no  misunderstanding.  It  must  include 


i;o      A  FIRST  BOOK  IN  BUSINESS  METHODS 


the  whole  agreement,  for  if  a  lease  or  contract  of  any  kind  be 
made  in  writing,  any  additional  verbal  agreement  is  of  no  avail 
in  law.  Each  of  the  parties  should  have  a  copy  of  the  lease. 

The  tenant  must  pay  the  rent  provided  for  in  his  lease, 
strictly  in  accordance  with  his  agreement.  Even  if  the  prem- 
ises are  rendered  useless  by  unavoidable  accident  of  fire,  or 
flood,  or  tempest,  the  tenant  will  still  be  liable  for  the  payment 
of  the  rent.  But  leases  generally  contain  a  clause  providing 
for  a  suspension  of  the  payment  of  the  rent  during  the  time 
the  premises  are  rendered  untenantable  by  reason  of  any  of 
these  causes. 

If  the  tenant  use  the  premises  for  any  purpose  not  contem- 
plated by  the  letting,  it  may  terminate  the  lease. 

112.  Repairs  and  Subletting1.  The  statutes  of  some  of 
the  states  provide  that  the  landlord  must  keep  the  premises  in 
repair,  but  in  others  there  is  no  such  provision.  The  parties 
to  the  lease  may  make  such  agreement  in  their  lease  respect- 
ing repairs  as  they  see  fit.  If  the  landlord  agrees  to  keep 
the  premises  in  repair  and  fails  to  do  so,  the  tenant  may 
deduct  from  his  rent  as  much  as  he  has  been  compelled  to  pay 
out  for  such  repairs  as  the  landlord  agreed  to  make ;  but  in 
order  to  do  this  he  must  have  given  due  notice  to  the  landlord 
of  the  necessity  of  such  repairs. 

When  the  lease  is  made,  a  definite  understanding  should 
be  had  by  the  parties  regarding  repairs,  and  the  agreement 
concerning  the  matter  should  be  fully  written  out  in  the 
lease. 

If  the  terms  of  the  lease  do  not  prohibit  the  lessee  from 
subletting  the  premises,  he  may,  if  he  wishes,  sublet  any 
part  or  the  whole  of  them,  but  he  will  still  be  liable  for  the 
payment  of  the  rent  if  the  sub-tenant  does  not  pay  it.  If  a 


GUARANTIES  171 


landlord  consents  to  take   a  substitute,  the  first  tenant  is 
released. 

113.  Notice  to  Quit.     If  the  lessee  does  not  remove  from 
the  premises  when  his  term  of  lease  has  expired,  his  right  to 
possession  cannot  be  taken  away  except  by  a  notice  to  quit. 
The  notice  to  quit  may  be  served  upon  the  lessee  or  any  per- 
son holding  under  him.     The  notice  should  state  that  posses- 
sion of  the  premises  is  demanded,  and  that  the  tenant  must 
vacate  within  the  time  specified  in  the  notice. 

114.  Guaranty.    A  guaranty  is  an  agreement  to  answer 
for  the  liability  of  another,  and  a  person  who  guarantees  the 
fulfillment  of  another's  agreement  is  called  a  guarantor.     If  a 
man  gives  his  note  for  a  certain  amount,  or  makes  a  contract 
to  do  a  certain  piece  of  work,  or  leases  some  property  for 
which  he  agrees  to  pay  a  certain  sum  per  month,  in  any  of 
these  cases  it  might  be  necessary  to  have  some  friend  guar- 
antee the  fulfillment  of   his  promise.     In   order   that   the 
guarantor  may  be  held,  the  guaranty  should  be  in  writing 
and  signed  by  him. 

Although  no  special  words  are  necessary  to  constitute  a 
guaranty,  the  guarantor  must  clearly  show  that  it  is  his  inten- 
tion to  guarantee  the  fulfillment  of  the  agreement.  The 
guarantor  cannot  be  held  for  the  fulfillment  of  the  agree- 
ment unless  the  conditions  of  the  guaranty  are  strictly  fol- 
lowed, and  he  can  be  held  only  for  the  amount  agreed  upon 
or  for  the  time  mentioned  in  the  guaranty.  If  the  guaranty 
is  for  the  payment  of  a  debt,  and  the  principal  fails  to  pay,  it 
is  usually  necessary  that  the  guarantor  be  notified,  but  in 
some  states  a  mere  indorsement  is  equivalent  to  a  guaranty, 
and  the  indorser  need  not  be  notified  (see  p.  172).  It  is  a  part 
of  business  courtesy,  however,  to  notify. 


172      A  FIRST  BOOK  IN  BUSINESS  METHODS 

Form  CXXVI. 

GUARANTY  OF  RENT  TO  BE  ATTACHED  TO  A  LEASE 

In  consideration  of  the  letting  of  the  premises  above  mentioned  to  the 
above  named  C.  C. ,  and  of  the  sum  of  one  dollar  to  me  paid  by  the  said  party  of 
the  first  part,  /do  hereby  covenant  and  agree,  to  and  with  the  party  of  the  first 
part  above  named,  and  with  his  legal  representative,  that  if  default  shall  at 
any  time  be  made  by  the  said  C.  C.  in  the  payment  of  the  rent  and  performance 
of  the  covenants  above  contained  on  his  part  to  be  paid  and  performed,  that  / 
will  well  and  truly  pay  the  said  rent,  or  any  arrears  thereof  that  may  remain  due 
unto  the  said  party  of  the  first  part,  and  also  all  damages  that  may  arise  in  con- 
sequence of  the  non-performance  of  said  covenants,  or  either  of  them,  without 
requiring  notice  of  any  such  default  from  the  said  party  of  the  first  part. 

Witness  my  hand  and  seal  this day  of ,  in  the  year  of  our  Lord 

one  thousand  nine  hundred  and 

[Name  of  witness.]  [Signature.] 

Form  CXXVII. 

GUARANTY  OF  PAYMENT  OF  NOTE 

For  value  received,  I  hereby  guarantee  the  payment  of  the 
within  note. 

[Date.]  [Signature,] 

Form  CXXVIII. 

GUARANTY  OF  PAYMENT  OF  BOND 

In  consideration  of  the  sum  of  one  dollar  to  me  in  hand  paid 
by  G.  P.,  I  hereby  guarantee  the  payment  of  the  foregoing  bond. 
Witness  my  hand  (and  seal),  the day  of ,  19 .. 

[Signature,  with  or  without  seal.] 

115.  Bill  of  Sale.  A  bill  of  sale  is  an  agreement  in  writ- 
ing by  which  one  person  transfers  his  interest  in  personal 
property  to  another.  Like  many  other  legal  documents,  no 
special  prescribed  form  is  necessary;  the  seller  of  the  "chat- 
tels" or  personal  property  simply  shows  by  his  bill  of  sale 


BILL  OF  SALE  173 


that  he  has  transferred  his  interest  in  the  property  to  some 
one  else. 

Form  CXXIX. 

BILL  OF  SALE 

KNOW  ALL  MEN  BY  THESE  PRESENTS,  That  7,  James  Stone 
of  Salinas,  County  of  Monterey  and  State  of  California,  in  consideration 
of  One  Hundred  and  Fifty  dollars,  to  me  paid  by  William  Irving,  of  the 
same  place,  have  bargained  and  sold  to  said  William  Irving,  the  following 
goods  and  chattels,  to  wit :  one  gray  horse,  one  carriage,  and  three  cows. 

In  witness  whereof ,  /have  hereunto  set  my  hand  and  seal,  this  2oth  day  of 
October,  A.  D.  iqoi. 

Signed,  sealed,  and  delivered )  j  / 

in  presence  of j"  1  f 


Although  the  above  is  the  usual  form  of  a  bill  of  sale,  the 
following  would  be  equally  binding  and  would  answer  every 
purpose ; 

Form  CXXX. 

SHORT  FORM  OF  BILL  OF  SALE 

SALINAS,  CAL.,  October  20,  1001. 

I  have  tJiis  day  sold  to  William  Irving,  one  gray  horse,  one  car- 
riage, and  three  cows. 

JAMES  STONE. 

116.  Bonds.  A  bond  is  a  writing  under  seal  by  which 
the  maker  acknowledges  some  debt,  liability,  or  duty.  It  is 
called  a  bond  because  it  binds  the  maker  of  it.  The  maker  of 
a  bond  is  called  the  obligor,  and  the  person  in  whose  favor  it 
is  made  is  called  the  obligee. 

A  bond  first  states  an  indebtedness,  and  then  a  condition  that 
if  the  obligor  performs  some  particular  act,  the  obligation  is 


174      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXXXI. 


ftnoro  all  Wen  b«  ttyse  prwente,  Th«  m*_ 
" 


Or-.h/^-oertain  attorney,  executors,  administrators  or  assigns,  for  which  payment  well  and  truly  to  be  made, 
we  bind  ourselves,  onr  heirs,  executors,  and  admjnfotrators,  jointly  and  severally,  flrmly  by  these  present* 

Sealed  with  our  Seals.    Dated  the.....X-<^-^?~::I~~-~-*'y  of...^^^^^.__ in  the  year 

one  thousand  eight  hundred  and 
W*r*i*....£i£es- 


4* 


d  for  Fidelity  of  Clerk  (front ) 


BONDS 


175 


Form  CXXXII. 


i  this  obligation  to  be  void;  otherwise  to  remain  in  full  force  and  virtue. 
Signed.  Scaled  and  Delivered  In  Pnsenct  of 


Bond  for  Fidelity  of  Clerk  (back) 


1 76     A  FIRST  BOOK  IN  BUSINESS  METHODS 


void;  otherwise  it  shall  remain  in  full  force  and  virtue.  The 
penalty  in  a  bond  is  usually  fixed  at  double  the  amount  of 
the  real  debt.  This  is  for  the  purpose  of  securing  the  full 
debt  with  interest  and  cost  if  necessary.  Let  us  examine  the 
working  of  a  bond. 

Example :  Suppose  John  Wood  agrees  to  build  a  house  for 
Peter  Brown  and  to  have  it  finished  according  to  certain  specifi- 
cations on  or  before  a  certain  day.  Peter  Brown  requires  John 
Wood  to  give  a  bond  for  two  thousand  dollars,  in  which  he  guar- 
antees that  the  house  shall  be  completed  in  good  workmanlike 
manner,  etc.,  at  the  time  specified.  Let  us  suppose  that  John 
Wood  goes  to  work  and  completes  the  house  and  does  everything 
exactly  according  to  agreement,  except  that  he  is  a  month  late  in 
completing  his  undertaking.  Now,  according  to  the  strict  terms 
of  the  bond,  he  is  indebted  to  Peter  Brown  to  the  amount  of  two 
thousand  dollars,  and,  under  the  early  common  law,  the  whole 
amount  of  the  bond  would  be  payable  to  Peter  Brown,  no  matter 
how  much  or  how  little  damages  or  inconvenience  Peter  Brown 
had  suffered  on  account  of  the  delay.  It  would,  however,  be 
exceedingly  hard  if  John  Wood  were  made  to  pay  all  this  money 
on  account  of  a  trifling  default,  and  now  the  law  will  not  compel 
him  to  pay  any  more  than  a  sufficient  amount  to  compensate  Mr. 
Brown  for  any  loss  or  inconvenience  which  the  delay  has  caused 
him. 

It  is  customary  to  have  one  or  two  sureties  to  a  bond,  and 
the  sureties  are  bound  the  same  as  the  obligor,  unless  the 
bond  states  otherwise. 

The  sureties  to  a  bond  are  usually  required  to  " justify" 
in  a  certain  amount.  This  means  that  they  must  swear  to 
being  worth  a  certain  amount  of  money  above  all  their 
indebtedness. 

Although  it  is  not  necessary  that  bonds  be  witnessed  and 


BONDS  177 


acknowledged,  it  is  sometimes  desirable  to  have  it  done,  such 
as  in  cases  where  the  signer  cannot  write,  and  is  obliged  to 
sign  by  his  mark,  or  in  any  other  case  where  a  question  may 
arise  regarding  the  genuineness  of  the  signature. 

Form  CXXXIII. 

COMMON  FORM  OF  BOND 

KNOW  ALL  MEN  BY  THESE  PRESENTS,  That  7 , 

of ,  County and  State  of ,  am  held  and  firmly  bound 

unto ,  of  the  same  place,  in  the  sum  of dollars,  lawful  money  of 

the  United  States,  to  be  paid  to  the  said ,  his  certain  attorney,  execu- 
tors, administrators,  or  assigns  ;  to  which  payment  well  and  truly  to  be  made, 
/  do  bind  myself,  my  heirs,  executors,  and  administrators,  firmly  by  these 

presents ;  sealed  with  my  seal,  and  dated  this day  of A.  D.  one 

thousand  eight  hundred  and 

The  condition  of  this  obligation  is  such,  that  if  the  above-bounden 

his  heirs,  executors,  administrators,  or  any  of  them,  shall  and  do  well  and  truly 
pay  or  cause  to  be  paid,  unto  the  aforesaid ,  his  executors,  adminis- 
trators, or  assigns,  the  full  and  just  sum  of  ...  dollars,  lawful  money,  as  afore- 
said, with  legal  interest  for  the  same,  on  or  before  the  . . .  day  of next, 

without  fraud  or  further  delay,  then  this  obligation  to  be  void  and  of  no 
effect,  otherwise  to  be  and  remain  in  full  force  and  virtue. 

Signed,  sealed,  and  delivered") 
in  the  presence  of 

[SEAL] 

117.  Bonds  for  Faithful  Service.  Persons  who  hold  posi- 
tions of  trust  or  responsibility  are  usually  required  to  give  a 
bond  signed  by  some  person  or  company,  thus  guaranteeing 
faithful  service  and  agreeing  to  make  good  any  loss  caused 
by  defalcation  or  carelessness. 

If  a  young  man  obtains  a  responsible  position  and  it  is 
necessary  for  him  to  give  a  bond  guaranteeing  faithful  per- 
formance of  his  duties,  and  he  has  no  personal  friend  who 
will  become  his  bondsman,  he  may,  if  he  has  good  character 

12 


178      A  FIRST  BOOK  IN  BUSINESS  METHODS 


and  good  habits,  arrange  with  a  surety  company  to  sign  his 
bond. 

There  are  now  several  surety  companies  which  give  bonds 
for  any  one  whom  they  consider  "  a  good  risk  "  When  an 
application  is  made,  it  is  necessary  to  give  three  references, 
with  whom  the  company  corresponds,  and  they  make  very 
careful  inquiries  concerning  the  character  and  habits  of  the 
applicant  before  signing  his  bond.  The  amount  of  the  surety 
bond  in  any  position  depends,  of  course,  upon  the  position ; 
but  any  young  man  or  woman  with  good  habits  and  a  good 
record  has  no  difficulty  in  securing  bonds  for  five  or  ten 
thousand  dollars  by  paying  a  small  sum  annually. 

NOTE. — For  Stocks  and  Bonds,  see  §§  127-129. 

EXERCISES  ON  CHAPTER  IX. 

/.     May  a  contract  be  partly  verbal  and  partly  written? 

2.  If  a  man  promises  to  give  a  suit  of  clothes  to  his  neigh- 
bor, is  the  promise  legally  binding  ? 

j.     Need  there  be  any  witnesses  to  a  written  contract? 

</.  If  you  make  your  friend  a  present  of  a  pair  of  shoes, 
can  you  compel  him  to  give  them  back  to  you  ? 

5.  If  a  man  make  a  contract  to  commit  a  forgery,  would 
the  contract  be  binding  upon  him  ? 

6.  What  is  a  bond  and  why  is  it  called  a  bond  ? 

7.  There  are  usually  two  parts  to  a  bond;  what  are  they? 

8.  Who  is  the  obligee  in  a  bond? 
p.     Who  is  the  obligor  ? 

70.  If  a  man  sign  a  bond  to  perform  a  piece  of  work  before 
a  certain  day  and  there  is  a  slight  default  in  the  performance 
of  the  work,  does  the  whole  sum  become  due  ? 

n.    What  is  the  surety  of  a  bond  ? 


BONDS  179 


12.  Is  it  necessary  to  have  a  bond  witnessed  and  acknowl- 
edged ? 

7j.    Name  some  kinds  of  officers  who  have  to  give  bonds. 

7^.  If  a  man  have  no  personal  friend  to  sign  his  bond,  what 
can  he  do  ? 

75.  Which  is  considered  better,  a  bond  signed  by  a  per- 
sonal friend  or  one  which  is  signed  by  a  surety  company  ? 
Why? 

16.  Will  a  surety  company  sign  a  bond  for  any  one  who 
applies,  if  the  regular  fee  is  paid  ? 

77.    What  is  a  landlord  ? 

1 8.    What  is  a  lease  ? 

7p.  Can  you  make  a  verbal  contract  which  will  be  bind- 
ing for  renting  a  house  for  more  than  one  year  ? 

20.  Is  any  special  wording  necessary  to  make  a  written 
lease  binding? 

21.  Suppose  you  rent  a  house  for  a  year  and  the  house 
burns  down  after  one  month,  would  you  be  obliged  to  pay 
rent  for  the  whole  year  ? 

22.  Is  it  necessary  to  have  witnesses  to  a  written  lease  ? 

23.  What  is  a  notice  to  quit? 

24..  May  a  tenant  sublet  any  part  of  a  house  which  he 
has  rented? 

25.  You  have  a  house  known  as  No.   340  West  Main 
Street,  Bloomington,  111.,  which  you  rent  to  D.  W.  Miller  for 
one  year,  at  $12.00  per  month.     Write  the  lease.     May  the 
lease  be  partly  written  and  partly  verbal  ? 

26.  What  is  a  guaranty  ?    What  is  a  guarantor? 

27.  Is  a  guaranty  usually  in  writing  ?    Would  it  be  bind- 
ing if  it  were  not  in  writing  ? 

28.  Are  any  special  words  necessary  to  constitute  a  guar- 
anty ?    If  the  principal  fails  to  pay,  what  ought  to  be  done  ? 


i  So     A  FIRST  BOOK  IN  BUSINESS  METHODS 


29.     Name  some  conditions  under  which  a  guaranty  is  used. 

jo.     What  is  a  contract  ? 

j/.  Name  three  cases  in  which  the  law  requires  a  con- 
tract to  be  in  writing. 

32.     Is  a  contract  with  a  drunken  person  binding  ? 

jj.     Is  a  contract  with  an  insane  person  binding? 

34..    What  is  a  minor  ? 

jj".  Would  a  contract  made  with  a  minor  be  binding 
upon  him? 

GENERAL  REVIEW  EXERCISES 

/.  If  Thomas  ].  Ward  owes  you  $24.60  on  account,  how 
would  you  proceed  to  collect  it  ? 

2.  If  Mr.  Ward  pays  no  attention  to  your  first  notice,  what 
would  your  next  step  be ?  And  the  next? 

j.  If  a  person  signs  his  name  on  the  back  of  a  check  and 
then  adds  the  words,  "  Without  recourse  to  me,"  what  kind  of 
an  indorsement  is  that  ? 

4.  What  advantage  would  there  be  in  making  such  an 
indorsement? 

5.  When  is  a  sight  draft  payable  ? 

6.  If  no  place  of  payment  is  mentioned  in  a  note,  where 
should  it  be  presented  for  payment  ? 

7.  What  is  meant  by  the  legal  rate  of  interest  ? 

8.  How  do  business  men  get  information  regarding  the 
financial  standing  of  their  customers  ? 

o.  Name  some  of  the  companies  or  agencies  which  fur- 
nish such  information. 

10.  If  the  name  of  a  business  man  is  omitted  from  their 
reports,  does  that  indicate  that  his  business  credit  is  not 
good? 


BONDS  181 


u.  How  often  are  new  reports  gotten  out  by  these 
agencies  ? 

12.  Give  an  explanation  of  the  best  method  for  making 
change. 

7j.  When  goods  are  shipped  by  railroad  or  by  steam- 
boat, what  is  the  person  called  who  ships  the  goods  ? 

14..     What  is  the  person  called  who  receives  the  goods  ? 

75.  The  person  making  the  shipment  usually  receives  a 
receipt  for  the  goods  shipped.  What  is  this  receipt  called  ? 

16.  Does  he  receive  more  than  one  copy  of  this  receipt, 
and  if  so,  how  many  ?  What  is  the  object  in  having  more 
than  one  copy  ? 

77.  When  goods  are  shipped  by  express,  why  is  it  neces- 
sary that  the  name  of  the  sender  be  placed  upon  the  package  ? 

1 8.  What  advantage  is  there  in  marking  a  package  of  fruit 
or  flowers, "  Perishable  "  ? 

7p.  Give  an  explanation  of  a  bill  of  lading  with  draft 
attached. 


CHAPTER  X. 

MERCHANDISE  SALES,  STOCKS  AND  BONDS 

118.  Merchandise  Sales.  There  are  many  little  matters 
pertaining  to  the  sale  of  merchandise  and  the  laws  governing 
the  same,  with  which  every  person  who  buys  or  sells  any 
amount  of  goods  ought  to  be  familiar,  but  the  subject  is  such 
an  extensive  one  that  it  is  impossible  to  more  than  touch  upon 
a  few  of  the  most  important  points  in  a  work  of  this  kind. 

A  business  man  ought  to  know,  of  course,  when  a  written 
contract  is  necessary  in  making  a  sale ;  what  a  warranty  is 
worth ;  when  goods  may  be  stopped  in  transitu ;  how  far  a 
common  carrier  is  responsible,  etc. 

In  those  states  where  no  statutory  laws  governing  these 
matters  have  been  enacted,  a  part  of  the  common  law,  or  what 
is  known  as  the  statute  of  frauds,  prevails.  The  common  law 
provides  that "  no  contract  for  the  sale  of  any  goods,  wares,  or 
merchandise,  for  the  price  of  $50.00  or  more,  shall  be  allowed 
to  be  good  unless  the  buyer  shall  accept  a  part  of  the  goods 
so  sold,  and  actually  receive  the  same  or  give  something  in 
earnest  to  bind  the  bargain,  or  in  part  payment,  or  some  note 
or  memorandum  in  writing  of  said  bargain  to  be  made  and 
signed  by  the  parties  to  be  charged  by  such  contract,  or  by 
their  agents,  thereunto  lawfully  authorized." 

[182] 


SALES,  STOCKS  AND  BONDS  183 


Example  I :  A  man  goes  into  a  wholesale  establishment  to  pur- 
chase a  supply  of  hats  for  his  retail  store.  He  looks  the  stock  over 
and  finds  a  lot  of  six  dozen  hats  which  seem  to  be  satisfactory  in 
price  and  quality.  He  informs  the  merchant  in  the  wholesale  store 
that  he  will  take  the  hats,  and  asks  that  they  be  set  aside  for  him, 
at  the  same  time  saying  that  he  will  send  for  them. 

Although  there  are  several  opportunities  to  sell  the  hats  to 
those  who  are  anxious  to  buy,  they  are  held  for  the  retail  merchant 
who  promised  to  send  for  them,  until  it  is  too  late  in  the  season  to 
dispose  of  the  hats.  Now  this  was  very  unjust  to  the  wholesale 
dealer,  but  the  man  who  ordered  the  goods  was  not  obliged  to  take 
them  if  he  did  not  choose  to  do  so,  because  he  had  not  taken  any 
part  of  the  goods  with  him,  and  had  signed  no  memorandum  nor 
agreement,  nor  had  he  paid  anything  down  on  the  goods.  Had  he 
made  a  small  payment  on  them,  or  taken  away  even  one  of  the 
hats,  or  had  he  ordered  the  goods  by  letter,  then  the  agreement 
would  have  been  binding  upon  him.  If  the  price  of  the  articles 
sold  had  been  less  than  $50.00,  then  a  verbal  or  oral  contract 
would  have  been  binding. 

If  a  man  who  purchases  goods  or  chattels  pays  a  part  of  the 
purchase  price  down,  even  $1.00,  and  the  seller  accepts  it,  the 
bargain  is  binding  upon  both  parties,  providing  each  is  com- 
petent to  make  a  contract. 

Example  2 :  A  farmer  sold  to  a  drover  a  yoke  of  cattle  for 
$100,  and,  as  part  payment  on  the  cattle,  the  drover  paid  $5.00 
down  and  agreed  to  pay  the  balance  and  take  the  cattle  away 
within  a  week.  Before  the  expiration  of  a  week  the  farmer  had 
an  opportunity  to  sell  the  cattle  for  $125,  which  he  did.  When 
the  drover  returned  to  get  his  cattle  the  farmer  offered  to  return 
the  $5.00  which  he  had  received,  thinking  that  would  settle  the 
matter ;  but  the  drover  sued  the  farmer  for  the  amount  which 
he  claimed  he  could  have  made  as  profit  on  the  cattle, "and  col- 
lected it. 


1 84      A  FIRST  BOOK  IN  BUSINESS  METHODS 


If  the  seller  of  goods  sells  them  for  cash  and  the  purchaser 
does  not  pay  the  cash  as  per  agreement,  he  cannot,  of  course, 
take  possession  of  the  goods ;  and  if  the  payment  is  delayed 
an  unreasonable  time,  the  seller  may  sell  them  over  again. 

If  goods  are  sold  on  credit  and  the  man  to  whom  they 
are  sold  fails  to  pay  as  he  agreed  to  do,  the  seller  cannot  go 
to  the  purchaser's  store  and  reclaim  the  goods  on  the  ground 
that  they  are  not  paid  for.  He  must  collect  the  debt  in  the 
regular  way. 

119.  Stoppage  in  Transitu.  Although  the  seller  of  the 
goods  cannot  go  to  the  store  of  the  purchaser  and  reclaim 
them  in  case  the  purchaser  fails  to  pay  for  them,  he  can  stop 
the  delivery  of  the  goods  before  they  reach  the  purchaser  if 
he  should  find  that  the  purchaser  has  become  insolvent.  This 
is  called  stoppage  in  transit 21.  It  can  only  be  exercised  when 
the  buyer  is  insolvent  and  the  goods  are  not  paid  for. 

Example  I :  If  a  wholesale  firm  in  New  York  sells  to  a  retail 
dealer  in  Indiana  a  quantity  of  goods  on  credit,  and  before  the 
goods  are  delivered,  the  sellers  are  informed  through  Dun's  or 
Bradstreet's  commercial  agency,  or  in  some  other  way,  that  the 
buyer  has  become  insolvent  and  is  unable  to  pay  his  debts,  they 
can  at  once  telegraph  the  railroad  company  not  to  deliver  the 
goods.  The  railroad  company  is  now  bound  to  hold  the  goods, 
subject  to  the  order  of  the  seller. 

Example  2 :  Suppose  a  farmer  ships  a  carload  of  grain  to  a 
grain  dealer  in  a  distant  city,  with  the  understanding  that  the 
payment  for  the  grain  shall  be  made  at  some  future  time.  While 
the  grain  is  on  the  road,  the  farmer  learns  from  a  friend  that  the 
orain  dealer  has  become  insolvent.  The  farmer  at  once  tele- 
graphs the  agent  of  the  railroad  company  to  hold  the  grain  subject 
to  his  order,  and  the  railroad'  company  will  be  obliged  to  do  so.  < 


SALES,  STOCKS  AND  BONDS  185 


120.  Common   Carrier.     A  common   carrier   is   one   who 
undertakes  for  hire,  to  carry  goods  or  passengers  from  one 
point  to  another.    This  includes  only  those  who  make  a  regu- 
lar business  of  carrying  goods  or  passengers,  or  both,  such  as 
railroads  and  express  companies.     There   are  certain  laws 
governing  the  duties  of  a  common  carrier.    He  is  required  to 
carry  all  goods  which  are  offered,  such  as  he  is  accustomed  to 
carry  or  proposes  to  carry.     He  cannot  discriminate  in  favor 
of  any  one  person,  and  when  once  he  receives  goods  for  the 
purpose  of  carrying  them  from  one  point  to  another,  he  must 
deliver  them  safely.     If  the  goods  are  lost  or  stolen  or  burned 
while  in  his  possession,  he  must  pay  for  them  unless  he  can 
show  that  the  loss  or  destruction  of  the  goods  was  caused  by 
what  is  called  "an  act  of  God  or  by  a  public  enemy."    Violent 
storms,  lightning,  floods,  cyclones,  etc.,  are  things  which  can- 
not be  foreseen,  and  a  common  carrier  would  not  be  held 
responsible  for  any  damage  caused  by  them.     If  the  goods 
are  destroyed  by  fire  while  in  possession  of  a  common* car- 
rier, he  is  usually  held  responsible  for  their  full  value,  but  if 
the  fire  was  caused  by  a  stroke  of  lightning,  the  loss  must 
be  borne  by  the  owner  of  the  goods. 

121.  Market  Quotations.     Nearly  every  issue  of  the  news- 
papers published  in  our  large  cities  contains  a  record  of  the 
market  quotations  of   the  day,  and   every  person,  no  matter 
whether  he  be  a  business  man  or  not,  should  be  sufficiently 
familiar  with  these  quotations  to  understand  their  meaning. 
They  include  not  only  the  market  prices  of  grain,  provisions, 
and  live  stock,  but  also  the  quotations  of  the  principal  stocks 
and  bonds,  together  with  their  fluctuations  in  price.     The  quo- 
tations are  obtained  from  the  actual  sale  of  these  commodities 
in  the  principal  market  centers  of  the  country. 


1 86      A  FIRST  BOOK  IN  BUSINESS  METHODS 


122.  Boards  of  Trade.  In  most  of  the  larger  cities  of  the 
United  States  there  are  associations  of  business  men  organized 
for  the  purpose  of  furthering  commercial  interests  and  the 
enactment  of  rules  for  the  regulation  of  trade. 

An  association  of  this  kind  is  called  a  board  of  trade,  chamber 
of  commerce,  produce  exchange,  or  a  stock  exchange.  Grain  and 
provisions,  as  well  as  many  other  commodities,  including 
stocks  and  bonds,  are  bought  and  sold  there.  Some  of  these 
associations  are  devoted  to  transactions  in  single  classes  of 
commodities  or  investments,  as  cotton,  corn,  or  in  stocks  and 
bonds,  as  the  New  York  Stock  Exchange. 

The  principal  board  of  trade  of  the  United  States  devoted 
to  the  sale  of  grain  and  provisions  is  the  Chicago  Board  of 
Trade,  located  in  Chicago.  It  is  a  corporation  organized  under 
the  laws  of  the  state  of  Illinois,  and  its  members  buy  and  sell, 
on  the  floor  of  this  exchange,  the  larger  portion  of  the  cereals 
and  meat  products  of  the  Mississippi  Valley  and  the  West. 

Chicago  is,  in  fact,  the  greatest  wheat  market  in  the  world. 
The  price  of  wheat  in  Chicago  determines  the  price  of  wheat 
for  future  delivery  in  Europe,  South  America,  Asia,  and 
Africa.  The  millers  of  this  and  foreign  countries  wish  to 
know  what  their  grain  will  cost  them  in  any  given  month, 
and  the  future  price  of  grain  as  determined  by  the  Chicago 
Board  of  Trade  is  the  price  relied  upon  by  foreign  com- 
mission merchants  in  selling  their  grain  for  delivery  at  some 
future  time. 

The  board  of  trade  keeps  an  open  market  for  handling 
all  the  grain  of  the  world,  and  by  having  an  open  market  it 
makes  the  cornering  of  the  grain  business  an  absolute 
impossibility. 

The  margin  of  profit  between  the  consumer  and  the  pro- 
ducer of  grain  is  probably  the  smallest  of  any  commodity  in 


SALES,  STOCKS  AND  BONDS  187 


which  the  middleman  has  a  transfer.  The  margin  is  not 
more  than  three  cents  per  bushel.  The  local  grain  man  finds 
it  necessary  to  take  two  cents  and  Chicago  commission  houses 
not  more  than  one-half  cent. 

The  services  performed  for  the  producer  and  local  dealer 
of  grain  through  the  market  reports  by  means  of  the 
telegraph  and  telephone  is  very  great,  and  any  hour  of 
the  day  the  producer  of  grain  or  the  owner  of  the  elevator 
in  the  small  town  may  secure  the  market  price,  and  in  conse- 
quence the  elevator  owner  may  pay  the  producer  the  highest 
price  and  handle  his  business  on  this  very  narrow  margin, 
as  he  knows  what  he  can  sell  grain  for  at  any  special  time. 

123.  Sales  and  Values.  The  sales  in  this  board  of  trade 
determine  the  price  of  such  commodities  for  the  United  States 
and  practically  for  the  world.  Provisions  are  bought  and  sold 
on  the  board  of  trade  for  present  or  future  delivery.  When 
grain  is  sold  to  be  delivered  at  once,  it  is  called  cash  grain, 
and  one  who  deals  in  grain  to  be  delivered  at  some  future 
time  is  said  to  be  dealing  in  futures.  The  usual  time  for 
future  delivery  is  in  May,  July,  September,  and  December. 

The  changes  in  the  market  from  day  to  day  or  from  hour 
to  hour  are  dependent  on  the  actual  sales.  Whenever  a  sale 
is  made,  if  it  changes  in  price  ever  so  little  from  the  price  of 
the  last  amount  sold,  this  price  constitutes  a  change  in  the 
market  price.  These  changes  are  sometimes  very  frequent, 
the  prices  of  the  commodities  ranging  higher  or  lower  accord- 
ing to  the  opinion  of  the  buyer  or  seller  as  to  what  the  prices 
will  be  at  the  time  of  delivery,  be  it  in  the  months  of  May, 
July,  September,  or  December. 

A  person  who  buys  grain  or  provisions,  hoping  to  sell  later 
at  a  profit,  is  said  to  be  long  on  grain  or  provisions;  and  one 


1 88       A  FIRST  BOOK  IN  BUSINESS  METHODS 


who   sells  them,  hoping  to  buy  later  at  a  lower  price  and 
thus  make  a  profit  on  the  transaction,  is  said  to  have  sold  short. 

124.  Brokers  —  Bulls  and  Bears.  Only  members  can  deal 
on  the  floor  of  the  board  of  trade,  and  should  any  one  not  a 
member  desire  to  buy  or  sell  grain  there,  he  must  do  so 
through  some  one  who  is  a  member.  This  person  who  buys 
and  sells  for  another  is  called  a  broker,  or  commission 
merchant.  The  prices  charged  for  such  sale  or  purchase  are 
regulated  by  the  rules  of  the  board,  and  on  grain  range  from 
one-eighth  of  a  cent  to  one  cent  a  bushel,  according  to  the 
kind  and  quantity  of  the  grain  bought  or  sold. 


Form  CXXXIV. 


SATURDAY'S    RANGE    OF    PRICES 

The  following  shows  the  range  of  prices  Saturday 
on  the  Chicago  Board  of  Trade: 


--  Closing 
Fr 
Men.  7. 


Saturday,  Friday, 
Men.  8. 


Wheat— Open. 
March.  $  .75 

E'. 
. 

Corn- 
March 
May. 
July. 
Sept. 
Dec.. 

Oats 
March 
May. 
July. 
Sept .     . 

Flax- 

Por'k— 

March 1510 

May....  15.32J-6     15.32^      15.25  15.30 

July....  15.50         15.52J^     15.42^  15.47^ 

Lard- 
March..  9.27J6 

lay....  9.42*6       9.42^       9.37J^  9.42Ji 

uly....  9.52^       9.52^       9.47j|  9.52fi 

)t....  9.62J£       9.62^       9.62>g  9.62J^ 


1.72 


1.72 

15.20 
15.40 
15.57H 

9.30 


9.55 
9.67^ 


Persons  who  buy  grain  or  other  provisions  believing  that 
they  will  sell  for  a  greater  price  in  the  future,  are  called 


SALES,  STOCKS  AND  BONDS  189 


bulls.  This  name  came  to  be  applied  to  such,  operators  on 
the  board  because  of  the  tendency  of  a  bull  to  elevate  every- 
thing with  which  he  comes  in  contact.  Those  traders  who 
sell  provisions  believing  that  prices  will  decline  in  the  future 
are  called  bears. 

We  often  read  comments  in  the  newspapers  on  the 
market  prices  as  they  go  higher  or  lower,  and  such  state- 
ments may  be  seen  as  the  following:  "The  bulls  had  things 
their  own  way  to-day,"  which  means  that  prices  had  an 
upward  tendency ;  or  "The  bears  had  their  inning,"  indicating 
a  falling  market. 

The  opening,  high,  low,  and  closing  prices  of  commodities 
are  usually  given.    (See  Form  CXXXIV.) 

125.  Inspection  and  Grading.  The  prices  of  provisions 
dealt  with  on  the  board  of  trade  are  regulated,  as  are  the 
prices  on  commodities  sold  in  other  places,  by  the  demand 
and  the  supply  ready  to  fill  such  demand.  The  grain  and 
provisions  sold  on  all  regular  boards  of  trade  are  inspected 
and  graded  by  experts,  who  are  either  appointed  by  the  board 
or  by  the  state  governments. 

In  some  cases  such  inspection  is  regulated  by  statute  and 
carried  on  by  officers  of  the  state.  Grain  is  graded  according 
to  its  nearness  to  or  remoteness  from  a  certain  standard,  as 
No.  I,  No.  2,  No.  3,  No.  4,  or  "sample  grade,"  as  the  case  may 
be.  No.  i  is  the  best  and  "sample  grade"  the  poorest  quality. 
In  some  states  four  grades  of  wheat  and  corn  have  been 
decided  upon,  five  of  barley,  five  of  oats,  and  three  of 
rye.  The  quality  is  determined  by  the  size,  color,  and  full- 
ness of  the  kernel,  together  with  its  weight,  dryness,  and 
freedom  from  dirt.  This  grading  of  grain  greatly  facilitates 
trade,  because  it  establishes  a  basis  of  comparison  for  both 
buyer  and  seller. 


A  FIRST  BOOK  IN  BUSINESS  METHODS 


125  a.  Bucket  Shop.  The  Chicago  Board  of  Trade  has 
been  declared  by  the  Supreme  Court  of  the  United  States  a 
legitimate  and  desirable  organization,  as  a  large  portion  of 
the  grain  of  the  United  States  passes  inspection  in  Chicago 
and  is  handled  on  the  board  of  trade. 

But  there  are  organizations  of  men  formed  purely  for 
speculating  in  the  future  rise  and  fall  of  prices  of  commodities 
that  have  no  connection  with  the  board  of  trade  and  buy 
and  sell  no  grain.  These  organizations,  called  bucket  shops, 
have  been  declared  illegal  by  the  courts,  over  three  thousand 
of  them  being  closed  in  the  years  1908-1911  by  the  United 
States  government  authorities  because  they  had  no  legitimate 
trading  functions  and  were  gambling  organizations. 

126.  Stock  Companies.  When  several  persons  desire  to 
organize  a  company  other  than  a  partnership,  they  come 
together  and  make  out  a  statement  to  the  effect  that  they  desire 
to  organize  such  a  company,  stating  its  name,  the  place  and  kind 
of  business  they  wish  to  transact,  together  with  the  amount  of 
capital  and  the  division  of  this  capital  in  the  form  of  shares. 
This  certificate  is  then  sent  to  the  Secretary  of  State,  who  will 
grant  them  a  charter  which  defines  their  rights  and  powers. 

The  money  or  capital  of  the  company  is  called  the  capital 
stock,  and  this  stock  is  divided  into  shares  of  equal  amounts. 
The  usual  par  or  face  value  of  a  share  is  one  hundred  dollars. 

Every  person  who  joins  the  company,  or,  in  other  words, 
subscribes  and  pays  for  stock,  receives  a  certificate  of  stock 
showing  the  amount  of  his  holdings,  and  he  is  called  a  share- 
holder or  stockholder.  These  certificates  of  stock  may  be  trans- 
ferred from  one  person  to  another  by  indorsement.  Each 
shareholder  has  voting  power  in  the  company  or  corporation 
according  to  the  number  of  shares  he  holds. 


SALES,  STOCKS  AND  BONDS  191 


If  the  company  makes  profits,  they  are  divided  among 
the  stockholders  according  to  the  number  of  shares  held  by 
each,  and  such  divided  profits  are  called  dividends.  Dividends 
are  declared  on  a  percentage  basis;  i.  e.,  a  certain  number  of 
hundredths  of  the  capital  stock.  Dividends  are  declared 
quarterly,  semi-annually,  or  annually. 

127.  Stocks  and  Bonds.  Stocks  are  of  two  kinds,  pre- 
ferred and  common.  Preferred  stock  is  that  which  entitles  the 
owners  to  dividends  out  of  the  net  profits  in  preference  to  the 
common  stock.  Common  stock  entitles  the  owners  to  an  equal 
proportionate  dividend  of  the  corporate  profits  and  assets,  with 
one  shareholder  or  class  of  shareholders  having  no  advantage, 
priority,  or  preference  over  another.  Dividends  are  declared 
first  on  the  preferred  then  on  the  common  stock. 

Should  a  stock  company  wish  to  borrow  money  for  any 
purpose,  as,  for  example,  to  increase  its  plant  or  to  acquire 
more  money  to  carry  on  the  business,  it  may  issue  bonds  or 
certificates  of  indebtedness,  bearing  interest.  These  bonds 
may  be  transferred  the  same  as  stock.  They  are  issued  for  a 
number  of  years  and  have  coupons  attached  which  are  cut  off 
at  stated  intervals  and  presented  to  the  officers  of  the  com- 
pany for  the  payment  of  interest.  Bonds  are  secured  by  a 
mortgage  or  trust  deed  on  the  property  of  the  corporation. 
A  sum  is  usually  set  apart  annually  to  redeem  or  pay  for 
these  bonds  when  they  become  due.  This  sum  is  called  a 
sinking  fund.  The  owners  of  these  bonds  run  less  risk  of  loss 
than  the  shareholders,  for  the  bonds  bear  interest  whether 
the  company  is  able  to  pay  dividends  on  its  stock  or  not. 
If  the  company  is  very  successful,  however,  the  shareholders 
may  fare  better  than  the  bondholders,  for  the  latter  are 
entitled  to  the  interest  stipulated  in  the  bond  only,  while 


192      A  FIRST  BOOK  IN  BUSINESS  METHODS 


the  shareholders  may  receive  large  dividends.  The  United 
States  Government  issues  bonds  from  time  to  time;  that  is,  it 
borrows  money  and  issues  certificates  of  indebtedness  which 
bear  interest  for  the  amount.  These  bonds  usually  bear 
interest  at  2,  3,  or  4  per  cent,  and  are  called  Government  twos, 
three 's,  and  fours. 

128.  Stock  Exchanges.    Stocks  and  bonds,  especially  of 
the  larger  corporations,  are  frequently  bought  and  sold,  and 
in  order  to  have  a  place  where  people  wishing  to  buy  and 
sell  can  come  together,  stock  exchanges  have  been  formed  in 
the  leading  cities  of  this  and  other  countries.    The  principal 
stock  exchange  in  the  United  States  is  the  New  York  Stock 
Exchange  in  New  York  City.    There  the  members  buy  and 
sell  stocks  and  bonds  for  themselves  and  others,  the  same  as 
grain  and  other  commodities  are  bought  and  sold  in  the 
Chicago  Board  of  Trade.    The  market  prices  of  these  stocks 
and  bonds  are  quoted  in  the  financial  columns  of  our  daily 
papers,  as  are  the  different  prices  of  other  commodities. 

In  the  table  of  prices  on  page  193  it  will  be  noted  that  both 
the  common  and  preferred  stocks  are  quoted,  and  also  that 
some  of  them,  as,  for  example,  the  Colorado  &  Southern,  have 
first  and  second  preferred  stock.  The  abbreviation  used  to 
distinguish  the  preferred  from  the  common  stock  is  pfd.  All 
stocks  not  otherwise  marked  are  common  stocks. 

129.  Of  the  Quotation's  Value.    The  value  of  the  stocks 
quoted  on  the  following  page  depends  upon  a  number  of  con- 
siderations, some  of  which  are  the  reputation  of  the  managers 
of  the  various  corporations,  the  amount  and  regularity  with 
which  dividends  havebeen  paid  in  the  past,  the  amount  of  bonds 
outstanding,  the  earning  capacity,  present  and  prospective. 


SALES,  STOCKS  AND  BONDS 


193 


Form  CXXXV. 
RANGE  OF  PRICES  ON  THE  NEW  YORK  STOCK  EXCHANGE 

The  following  table  shows  the  range  of  prices  on  the  New  York  Stock  Exchange  March  8, 
the  number  of  shares  traded  in  each  stock,  and  the  net 


March  7,  1902: 


changes  from  the  closing  prices 


STOCKS. 


Am.  Sugar... 

Am.  Loco 

Am.  Cot.  Oil. 

Dopfd 

Am.  Smelting. 

Dopfd 

Am.  Gr.  Tw... 
Am.  Linseed.. 

Dopfd 

Am.  CarFdy.. 

Dopfd 

Am.  Ice 

Dopfd 

Atchison 

Dopfd 

Anaconda 

Amal.  Copper. 
Bkln.  R.  T.... 

B.&O 

C.&N.W.... 
Chi.  &  Alton.. 
C.,  M.  &  St.  P 
C.,St.  P.,M.&0 
C.,  R.  I.  &  P. . 
Chi.Terml 

Dopfd 

Can.  Pacific... 
Cn.  Gas  (N.Y.) 
Colo.  &  So.... 

DolBtpfd.  . 

Do2dpfd... 
C..I.&L 


4,900 
800 

1,700 
200 
400 
100 


100 
3,200 

100 
2,700 

600 
2,000 
9,000 

600 
13,000 
1,000 
4,000 
1,100 
1,200 
3,200 

100 
4,400 

300 

100 
1,100 
2,000 
7,800 

800 
1,200 
1,500 


STOCKS. 

MM  K.  &  T.  pf 
Met.  St.  Ry.<. 
Mex.  C.  (Ltd.). 
Mo.  Pacific.... 
Mex.  N.  ctfa... 

Dopfd 

M.  &  St.  L  ... 
Nat.  Biscuit.  . 
National  Salt.. 
N.  Y.  Central . 
Norfolk&  W. 

Dopfd  

North  Am.  Co. 
N.  Y.,  O.  &  W. 
N.  Y.,  C.  &  S.  L 
N.  Y.  Dock  pf. 
P.  &  Eastern.. 
Peopled  Gas... 
Pa.  R.  R  . . . 
Pacific  Mail     . 
Pressed  Stl.  C. 

Dopfd 

Pacific  Coast  . 

Do  2d  pfd  . . 
Quicksilver... 

Dopfd  ...  . 
Reading 

Do2dpfd... 
Rubber  Good*,. 
Rep.  Iron  &S.. 

Dopfd 

Rutland  pfd.... 


300 

800 

1,100 

6,000 

17,200 

7,100 

2,300 

100 

100 

600 

400 

100 

1,700 

600 

100 

200 

100 

400 

12,900 

2,700 

300 

100 

1,000 

600 

700 

600 

3,400 

3,300 

1,100 

8,TOO 

74i* 

200 


47^ 


50^ 


151  >|  152 

47%    - 


72 


: 


It  will  be  noted  that  some  of  the  stocks  sold  at  very  much 
above  par — the  Chicago  &  North  Western  Railroad  at  two 
hundred  and  thirty  dollars  ($230)  per  share,  and  the  Consoli- 
dated Gas  Company  of  New  York  at  two  hundred  and  twenty- 
one  dollars  and  seventy-five  cents  ($221.75)  per  share;  i.  e.y  one 
share  of  Consolidated  Gas  stock  was  one  hundred  and  twenty- 
one  dollars  and  seventy-five  cents  ($121.75)  above  par.  It 
will  also  be  noted  that  others  sold  at  very  much  below  par. 
Quicksilver  stocks  sold  at  four  cents  ($.04)  on  the  dollar  or  at 
four  dollars  ($4.00)  a  share,  and  Chicago  Terminal  stock  sold 
at  seventeen  and  three-fourths  cents  ($.17!)  on  the  dollar. 


I94       A  FIRST  BOOK  IN  BUSINESS  METHODS 


In  the  following  quotation  of  bonds  the  interest  is  given, 
as,  Northwestern  Elevated  4's,  meaning  the  Northwestern 
Elevated  Railroad  bonds  bearing  4  per  cent  interest. 

Form  CXXXVI. 

PRICES  OF  BONDS 

Chicago  Gas  5s 1 

Northwestern  Elevated  4s 

West  Chicago  con.  5s 

Met.  Elevated  gold  4s 101 

Consumers'  Gas  5s 108 

Lake  Street  deb.  5s ,103^ 

Con.  Traction  4^8 70 

North  Chi.  City  Ry.  4^8 106$ 

Pearsons-Taft  4.40s 99M 

QUESTIONS  ON  CHAPTER  X. 

/.  From  what  source  are  the  market  quotations  given 
in  the  newspapers  derived  ? 

2.    What  is  a  board  of  trad,e  ? 

j.  Is  there  any  difference  between  a  board  of  trade  and 
a  stock  exchange  ? 

4.  Of  what  use  is  a  board  of  trade? 

5.  What  is  cash  grain?    What  is  "dealing  in  futures"  ? 

6.  What  makes  the  changes  in  prices  of  commodities 
bought  and  sold  in  the  market? 

7.  Who  can  buy  and  sell  on  the  floor  of  the  board  of 
trade  ? 

8.  What  is  a  broker? 

o.    What  is  meant  by  the  term  "bear"?     By  "bull"? 

10.  How  many  grades  of  wheat  are  there  in  some  grain 
markets  ?  How  many  of  corn  ?  How  many  of  oats  and  rye? 

n.    What  is  meant  by  capital  stock  ?    By  par  value  of  stock? 

12.    What  is  meant  by  dividends  ? 

ij.  What  determines  the  value  of  stocks  and  bonds  sold 
in  the  market  ? 


SALES,  STOCKS  AND  BONDS  195 

14..    What  is  common  stock?     What  is  preferred  stock? 
75.     Does  capital  stock  draw  interest? 

16.  Where  is  the  leading  stock  exchange  of  the  United 
States? 

1 7.  Of  what  value  are  boards  of  trade  and  stock  exchanges 
to  a  community? 

18.  Telegraph  your  broker  in  Chicago  to  buy  for  you 
50,000  bushels  of  corn. 

GENERAL  REVIEW  EXERCISES. 

7.  What  is  the  usual  size  of  a  sheet  of  paper  for  & 
business  letter  ?  How  should  it  be  folded  ? 

2.    What  is  meant  by  the  address  of  a  letter  ? 

j.     What  is  the  salutation  ? 

^.  What  is  the  phrase  "Yours  truly"  called  when  placed 
at  the  end  of  a  letter? 

5.  What  is  a  telegraphic  code  ? 

6.  What  advantage  is  there  in  using  these  codes  ? 

7.  Are  the  words  in  the  address  and  signature  of  a  tele- 
gram counted  in  the  cost  for  sending  the  message  ? 

8.  After  sending  a  customer  an  invoice  of  goods  purchased 
by  him,  you  find  that  you  have  made  a  mistake  in  the  footing, 
and  the  amount  is  $10.00  too  much.    Would  you  send  him  a 
corrected  invoice  or  a  credit  memorandum  for  the  amount? 

p.     What  is  a  check  ?    Is  it  legal  tender  ? 

70.     What  advantage  is  there  in  having  a  check  certified? 

77.     What  is  meant  by  the  term  "ironclad  note"? 

12.    What  is  a  collateral  note  ? 

7j.  You  wish  to  send  a  package  by  express  C.  O.  D.  to  H. 
G,  Hulbert,  Stillwater,  Minn  What  papers  are  you  required 
to  make  out?  What  is  the  express  agent  required  to  do? 


CHAPTER    XL 


PARTNERSHIP,  INSURANCE 

130.  Partnership.  A  partnership  is  an  association  of  two 
or  more  persons  for  the  purpose,  of  carrying-  on  business. 
Each  member  of  the  firm  should  contribute  something 
toward  the  success  of  the  enterprise,  but  it  is  not  necessary 
that  each  contribute  an  equal  amount  of  capital,  nor  need 
their  investments  in  the  enterprise  be  all  of  the  same  kind. 
Sometimes  one  will  invest  capital  without  undertaking  any 
personal  service,  while  others  contribute  labor  or  experience. 
The  division  of  the  profits  is  usually  in  proportion  to  the 
value  of  that  which  each  partner  puts  into  the  business.  If 
there  be  no  special  agreement  among  the  members  as  to  the 
division  of  the  profits,  the  law  will  presume  that  the  partners 
intend  to  divide  the  profits  equally. 

When  a  partnership  of  two  or  more  individuals  is  formed, 
the  agreement  which  they  enter  into  regarding  matters  of 
detail  should  be  in  writing.  Although  there  is  no  provision 
of  law  which  positively  requires  that  an  agreement  for  a  part- 
nership should  be  in  writing-,  there  are  many  matters  per- 
taining to  any  business  which  may  cause  dissatisfaction  among 
partners,  and  it  is  best  in  all  cases  to  have  a  written  agree- 
ment specifying  the  kind  of  business  in  which  the  firm  is  to 
engage,  the  names  of  the  parties,  and  the  period  during  which 


PARTNERSHIP,  INSURANCE  197 


the  partnership  is  to  last,  the  amount  which  each  partner  is 
to  contribute  to  the  business,  the  nature  of  the  duties  which 
any  of  them  undertake  to  perform,  and  any  other  matters  of 
moment  pertaining  to  the  business. 

The  duration  of  the  partnership  should  be  specified,  because 
if  that  is  not  done  any  partner  may  withdraw  when  he  chooses, 
although  he  could  not,  by  withdrawing,  rid  himself  of  any 
responsibilities  which  had  already  been  incurred.  (See  §  133.) 
If  one  of  the  partners  dies,  the  firm  is  dissolved,  unless  the 
others  agree  to  continue  the  business. 

If  the  profits  of  the  firm  are  not  to  be  divided  equally 
among  the  partners,  the  manner  of  their  division  should  be 
clearly  stated. 

131.  Silent  and  Nominal  Partners.  Sometimes  a  person 
invests  capital  in  the  business,  but  takes  no  active  part  in  its 
management.  Such  a  person  is  called  a  silent  partner.  He 
usually  has  a  share  in  the  gain,  and  is  as  fully  responsible  for 
the  debts  of  the  firm  as  though  he  took  an  active  part  in  the 
management  of  the  business. 

Sometimes  a  person  lends  his  name  to  a  partnership  for 
the  purpose  of  giving  credit  to  the  business,  and  he  is  then 
said  to  be  a  nominal  partner.  Although  he  has  no  capital  in 
the  business  and  gets  no  profit  out  of  the  transaction,  he  is 
responsible  for  the  obligations  of  the  firm,  because  those 
who  do  business  with  the  firm  are  perhaps  induced  to  do 
so  on  account  of  his  connection  with  it.  It  is  not  a  common 
occurrence  for  a  person  to  become  a  nominal  partner,  and  he 
does  so  only  as  an  unusual  accommodation  to  his  friends, 
having  implicit  faith  in  the  honesty  and  integrity  of  the 
other  partners,  just  as  a  man  has  who  signs  for  a  friend  an 
accommodation  note. 


198      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXXXVII. 


4 
A 


ait  Barliri  .ton  nimcd  to.  ojred 


tta.  /or  IV  WJPM  «<wt  nuuvniM  «f  in  uid  t.ui«u,  l 
,11!  U  151 


tenors    and  to  Iko  fcfmosf  of  their  tkill  and  pout?  exert  Ikemulvts  /or  their  joint  interest 

»  (to  ou-wi.  e/braoil-.  ,3.<»  »(».  I*a(  lte«  fUl  end  .01  a  all  lima  iarin,  Ik, 
t.  bar,  po».  <nd  durturje  toiuUy  irtimn  (ken.  «JI  mto  o«i  «t«r  uftnxt  ttol  moj  i. 
«>^nn  out  nonVnm(  tf  tk,  uid  tasiw«,  md.  Out  ell  faint,  pr&l,  and  increan 


Articles  of  Copartnership 


PARTNERSHIP,  INSURANCE 


199 


Form  CXXXVIII. 


jjlnJ  il  i)!  fanti  i»  <*i  irt»«n  Ik.  oii  J»rtfcl.  M  (km  ikil  fa  *o<i  oxJ  t^l  <d  dl  tow, 
«nnn«  (k>  Mnliiiiujit.  o/  (tor  a-porlwrikj,  jn^cl,  >rt,  «J  MM  took  df  Keoutf,  »kmin  nek  iff  Ikt 
Mfcf  ca-tartntn  ihal!  mtv  and  in  torn,  u  nil  oB  M»y  »»  (k™  or  rtkn-  o/  Om  mriuil.  paid, 
laid  cut.  mi  uptiut,  i,  uJ  dixtt  tl*  mid  tuvua,  la  alto  all  axd,,  > 


'id    tutnui.   and    (k.    lum^mnl    (Vtm,/, 

i  Mwem   (k.  wtd  eo-portturt,  sa  that  either  of  them  may  haM 


•allfrafit,  and  inereau  ij  (km,  or  ri(krr  tf  (km,  jwloiW,   mi  oj<o,  all 

and  all  cO*r  thing,  ty .(km  mod.,  recriiol,  duoar<«(.  ortrA  done,  or  mftrtif  in 


Ira.,  jiat.  and  foal  account  of  all  tHaift  nlatiaa  to  (Mr  tod  teiwM.  and  >n  < 

tamt,  a*d  alt  v*l  nt,y  Ih,  ,txh  and  tttdu.  o>  wH  ai  (k.  aaiiu  and  iumu.  (ktrm/.  .kifk  <kall  o 


Articles  of  Copartnership 


132.  Liability  of  Partners.  In  all  matters  of  ordinary 
business,  each  partner  has  authority  to  act  for  the  firm,  and 
his  acts  will  be  binding  upon  the  firm ;  but  this  would  apply 
only  to  transactions  in  their  regular  line  of  business.^-  One 
partner  cannot  execute  a  bond  by  which  the  firm  becomes  a 


200     A  FIRST  BOOK  IN  BUSINESS  METHODS 


surety,  or  make  a  deed  of  real  estate  belonging  to  trie  firm, 
or  confess  judgment  in  the  name  of  the  firm,  unless  his  asso- 
ciates concur  with  him. 

Every  partner  in  an  ordinary  firm  is  liable,  together  with 
the  others,  for  the  whole  indebtedness  of  the  firm,  and  if  a 
firm  becomes  embarrassed  so  that  it  cannot  pay  its  creditors 
in  full,  they  can  proceed  against  the  firm  and  take  any  real 
or  personal  property  belonging  to  it  which  can  be  found.  If 
there  is  not  a  sufficient  amount  of  property  belonging  to  the 
firm  to  pay  its  indebtedness,  they  can  collect  from  the  private 
property  of  any  or  all  of  the  partners. 

If  one  of  the  partners  of  a  firm  becomes  privately  indebted 
so  that  he  cannot  pay  his  creditors  in  full,  they  can  get  judg- 
ment against  him  and  take  such  of  his  property  as  is  not 
exempt  from  execution,  and  if  there  is  not  a  sufficient  amount 
of  his  private  property  to  pay  his  indebtedness,  they  can  take 
proceedings  to  have  the  interest  which  he  holds  in  the  firm 
applied  to  the  payment  of  his  debts.  But  they  could  not  take 
in  execution  any  specific  piece  of  property  belonging  to  the 
firm,  as  his  share,  and  apply  it  to  the  payment  of  his  debts. 
An  accounting  must  first  be  had,  showing  how  much  the  firm 
is  owing  him  as  his  share  in  the  business,,  and  this  must  be 
done  in  a  manner  prescribed  by  law. 

A  new  partner  admitted  into  the  business  is  not  responsible 
for  the  debts  of  the  old  firm  unless  he  has  previously  agreed 
to  become  so  responsible. 

133.  Methods  of  Dissolution.  A  partnership  may  be  dis- 
solved by  mutual  agreement  of  the  partners  or  by  a  decree  of 
a  court  of  equity. 

If  one  of  the  members  of  a  firm  should  conduct  himself 
in  suoh  a  way  that  the  firm  is  likely  to  become  financially 


PARTNERSHIP,  INSURANCE  201 


embarrassed,  and  should  refuse  to  agree  to  a  dissolution  of 
the  partnership,  the  partners  wishing  to  have  the  partnership 
closed  up  may  apply  to  a  court  of  equity  for  a  decree  of  dis- 
solution. 

A  member  of  the  firm  cannot  withdraw  from  the  partner- 
ship at  any  time  he  chooses  to  do  so  and  thus  rid  himself  of 
any  obligation  or  indebtedness  which  the  firm  has  already 
incurred.  Some  provision  must  first  be  made  for  paying  the 
debts  of  the  firm. 

If  a  member  of  the  firm  withdraws  from  the  partnership, 
he  should,  in  order  to  protect  himself  from  any  obligations 
which  the  firm  may  incur  after  he  has  retired,  publish  a  notice 
of  his  withdrawal  in  the  newspapers,  and  he  should  also  send 
a  notice  to  those  with  whom  the  firm  has  been  doing  business. 

Form  CXXXIX. 

NOTICE   OF  DISSOLUTION 

The  copartnership  heretofore  existing  between  R.  Blair  and 
L.  Allen,  under  the  firm  name  of  Blair  &  Allen,  is  this  day  dis- 
solved by  mutual  consent. 

The  business  will  be  continued  by  R.  Blair,  who  is  authorized 
to  settle  the  accounts  of  the  late  firm. 

August  10,  1901.  R.  BLAIR. 

L.  ALLEN. 

134.  Limited  or  Special  Partnership.  The  laws  of  many 
of  the  states  provide  for  a  limited  or  special  partnership.  This  is 
an  arrangement  by  which  a  person  can  put  a  certain  amount 
of  money  into  a  business  and  receive  a  proportion  of  the 
profits  without  being  liable  to  lose  any  more  money  than 
he  has  invested  in  the  business.  A  partnership  of  this  kind 
can  be  formed  only  under  positive  statutes. 


202      A  FIRST  BOOK  IN  BUSINESS  METHODS 


135.  Insurance.  Insurance,  although  known  to  the  ancients, 
has  had  its  principal  development  during  modern  times.  It 
was  first  applied  to  shipping.  The  fear  of  partial  or  total  loss 
of  a  cargo,  through  the  action  of  the  elements  or  foes  on  the 
high  seas,  tended  to  check  the  growth  of  commerce.  Few 
people  were  so  wealthy  that  they  alone  could  afford  to  suffer  the 
great  loss  of  a  ship  and  cargo.  By  dividing  the  risk  among 
many,  it  was  seen  that  the  proportion  of  loss  to  each  might  be 
small.  Associations  were  formed  for  the  purpose  of  protect- 
ing the  members  from  losses  of  this  nature,  and  out  of  such 
associations  have  grown  the  modern  insurance  companies. 

The  insurance  business  has  grown  to  mammoth  propor- 
tions during  the  last  century,  until  now  no  prudent  man  will 
allow  his  property  to  be  without  the  protection  of  insurance. 
The  object  of  insurance,  then,  is  to  distribute  any  losses  which 
may  occur  to  one  or  more  persons  among  a  great  many  per- 
sons, and  to  scatter  a  large  number  of  risks  over  a  wide  terri- 
tory and  during  a  long  period  of  time,  so  that  the  loss  to  each 
person  will  be  small. 

Example  :  Suppose  that  one  hundred  buildings  out  of  every 
five  thousand  should  burn  every  year.  No  one  can  tell  which 
hundred  this  will  be,  but  if  each  owner  of  the  five  thousand  build- 
ings pays  his  pro  rata  share  of  the  value  of  the  one  hundred 
buildings,  the  loss  will  fall  but  lightly  on  each,  where  otherwise 
some  might  be  totally  ruined. 

Insurance  may  be  defined  as  a  contract  whereby  one  person 
agrees  to  protect  another  against  loss.  The  written  contract 
by  which  one  guarantees  to  protect  another  is  called  a  policy, 
and  the  amount  paid  for  such  a  guarantee  is  called  the 
premium.  Both  parties  are  bound  by  the  conditions  named  in 
the  policy. 


PARTNERSHIP,  INSURANCE  203 


136.  Fire  Insurance.    There  are  many  kinds  of  insurance 
and  a  great  variety  of  risks.     The  farmer  sometimes  insures 
his  property  against  loss  by  storms ;  the  manufacturer  against 
loss  by  boiler  explosions;  the  banker  against  loss  from  a 
robbery;  but  the  most  common  kinds  of  insurance  are  fire 
insurance,  life  insurance,  and  marine  insurance.     The  most 
important  of  all  these  is  fire  insurance,  and  as  the  underlying 
principles  are  the  same  for  all,  we  will  consider  at  length 
only  this  most  common  form. 

By  a  careful  compilation  of  statistics,  insurance  companies 
are  enabled  to  determine  approximately  what  the  fire  loss 
will  be  for  a  certain  year  and  upon  certain  classes  of  prop- 
erty, if  there  are  no  extraordinary  conflagrations.  The  rates 
of  insurance  are  based  upon  this  estimate  and  the  sums  so 
collected,  though  small  in  each  particular  case,  reach  large 
proportions  in  the  aggregate.  A  portion  of  the  amounts  col- 
lected in  premiums  is  applied  to  the  paying  of  losses.  An 
effort  is  made  by  insurance  companies  to  keep  the  sum  col- 
lected very  close  to  the  actual  loss.  The  profit  to  all  companies 
doing  business  in  the  United  States  for  the  past  ten  years,  on 
insurance  written,  has  been  one-third  of  a  cent  out  of  each 
dollar  received.  In  other  words  the  people  of  the  United 
States  have  received  their  insurance  practically  at  cost. 

137.  Classes  of  Companies.    There  are  two  general  classes 
of  companies,  mutual  companies  and  "Old  Line"  companies.    In 
the  former,  each  person  insured  is  a  shareholder,  and  the 
losses  are  apportioned  among  them  according  to  the  amount 
of  loss  suffered  by  such  shareholders.     In  the  "Old  Line'' 
companies,  a  company  is  formed  whose  shareholders  assume 
all  liability  for  loss  and  reap  all  the  gain,  if  there  be  any. 
The  "Old  Line"  companies  depend  for  their  profits  for  the 


204      A  FIRST  BOOK  IN  BUSINESS  METHODS 


most  part  on  the  interest  of  the  money  paid  them  in  pre- 
miums. For  example,  should  the  premiums  paid  in  to  such 
a  company  equal  $1,000,000  a  year,  this  company  would  have 
the  use  of  approximately  $500,000  a  year.  This  money  is 
invested  by  the  companies  in  the  best  securities  and  yields 
them  a  fair  interest.  Thus  we  see  that  insurance  is  of  advan- 
tage to  both  parties.  It  relieves  the  person  who  takes  out 
the  policy  of  a  risk  he  would  otherwise  have  to  assume  and 
leaves  a  margin  of  profit  for  the  insurer  on  account  of  the  risk 
of  loss  he  takes. 

138.  Policies.  Policies  of  insurance  are  of  two  kinds,  open 
and  valued.  The  usual  form  of  policy  is  the  open  policy, 
which  leaves  the  question  of  value  to  be  determined  after 
the  loss  has  occurred.  Some  states,  however,  have  by  law 
declared  all  policies  on  buildings  to  be  valued  policies,  which 
means  that  the  value  of  the  property  insured  is  fixed  at  the 
time  of  writing  the  policy,  and  that  that  amount  must'  be 
paid  whenever  a  total  loss  occurs  regardless  of  whether  or 
not  it  can  be  shown  that  the  building  may  be  replaced  for  a 
less  amount.  These  laws  have  been  strenuously  opposed  by 
the  insurance  companies  because  they  claim  that  it  puts  a 
premium  on  crime,  for,  should  a  building  be  insured  for  more 
than  its  value,  the  owner  might  be  tempted  to  destroy  the 
building  in  order  to  secure  the  amount  of  the  policy. 

The  policy  holder  must  have  an  insurable  interest  in  the 
property  he  insures  or  the  policy  is  void.  Insurable  interests 
are  of  many  kinds.  Whoever  owns  property  or  has  any  inter- 
est in  it,  or  stands  in  the  nature  of  a  trustee,  executor,  or 
administrator,  or  is  a  mortgagee  or  part  owner,  may  insure 
it  for  that  interest.  The  law  will  not  permit  one  to  insure 
property  for  a  greater  amount  than  his  insurable  interest.  If 


PARTNERSHIP,  INSURANCE  205 


he  owns  a  house,  he  may  insure  it  for  its  insurable  value.  If 
he  owns  any  portion  of  a  piece  of  property,  say  one-half,  he 
may  insure  for  that  portion,  but  that  portion  only. 

139.  What  Policies  Contain.  The  policies  in  a  fire  insur- 
ance contract,  although  there  are  usually  a  multiplicity  of 
conditions,  always  contain  the  following  principal  elements : 

1.  A  description  of  the  property  insured. 

2.  The  amount  for  which  the  insurance  policy  is  given. 

3.  The  length  of  time  the  policy  is  to  run. 

4.  The  amount  of  premium  to  be  paid. 

If  the  property  insured  is  a  building,  the  description 
includes  the  location,  the  materials  of  which  it  is  constructed, 
the  way  in  which  it  is  heated  and  lighted,  the  location  of  "the 
nearest  buildings  and  the  materials  of  which  they  are  con- 
structed, the  use  to  which  the  building  is  to  be  put,  the  interest 
of  the  insured  and  the  mortgages,  if  any,  that  are  carried  on 
the  property,  and  the  amount,  if  any,  of  insurance  already 
carried. 

If  it  is  personal  property  that  is  insured,  a  general  de- 
scription of  the  property  is  given,  and  its  value;  also  the  kind 
of  building  in  which  it  is  placed,  with  a  description  of  the 
surrounding  buildings,  as  above. 

There  is  usually,  also,  a  clause  forbidding  the  storage  of 
explosives,  such  as  gunpowder  and  dynamite,  excepting  very 
small  quantities,  or  inflammable  oils,  such  as  kerosene,  gas- 
oline, or  benzine,  in  the  building  or  within  a  certain  distance 
of  the  building,  excepting  such  an  amount  as  shall  be  neces- 
sary for  lighting  or  heating.  This  clause  does  not  prevent 
persons  in  business  from  selling  gunpowder  and  inflammable 
oils  in  the  way  of  trade,  because  the  insurer  is  supposed  to 
know  the  nature  of  the  business  before  he  issues  the  policy. 


206       A  FIRST  BOOK  IN  BUSINESS  METHODS 


140.  Forms  of  Risks.     In  fire-insurance  policies  the  risk 
taken  by  the  insurer  is  the  danger  of  loss  by  fire  and  does  not 
include  loss  by  lightning  or  wind  storms  unless  such  loss 
causes  fire,  or  is  particularly  provided  for  in  the  policy.     It 
does,  however,  include  the  damage  sustained  by  putting  out  a 
fire.    This  is  very  often  greater  than  the  loss  actually  caused 
by  the  fire  itself. 

As  so  many  elements  enter  into  an  insurance  policy,  it  may 
be  readily  seen  that  anything  which  tends  to  alter  the  risk 
will  be  of  supreme  importance  to  the  insurer.  Therefore,  any 
alteration  of  the  building,  or  change  in  surrounding  buildings, 
or  in  the  use  to  which  the  building  is  to  be  put,  would  change 
the  risk.  A  change  in  the  ownership  of  such  building  would 
also  change  -the  risk.  A  change  of  the  risk  must  have  the 
assent  of  both  parties,  since  an  insurance  policy  is  a  contract. 
The  insurance  company  should,  therefore,  be  immediately 
notified  of  any  contemplated  changes  in  order  that  the  policy 
may  not  be  rendered  void. 

Should  an  insured  building  be  vacant  for  any  length  of 
time,  the  insurer  should  be  notified.  Vacant  buildings  are 
very  hazardous  risks,  because  they  are  earning  nothing  for  the 
owner  and  it  is  presumed,  and  the  presumption  is  based  on 
experience,  that  unproductive  buildings  are  more  likely  to  be 
set  on  fire  than  those  which  are  earning  something  for  the 
owner.  So  also,  if  a  building  is  sold,  the  policy  become's  void 
unless  the  company  is  notified,  because  the  risk  is  changed ; 
and  furthermore,  because  the  insured  has  no  insurable  interest 
in  it. 

141.  Protection  from  Fraud.    It  is  of  the  utmost  impor- 
tance to  the  community  as  well  as  to  the  insurer,  that,  in 
the  event  of  total  loss,  the  insured  must  himself  suffer  loss. 


PARTNERSHIP,  INSURANCE  207 


Therefore,  policies  are  never  knowingly  written  for  the  full 
value  of  the  property  insured.  If  it  is  insured  to  the  full 
value,  the  owner  may  be  tempted  to  commit  fraud  or  crime 
in  order  to  reap  the  benefit  of  his  insurance. 

Insurance  companies  usually  ask  the  applicant  many  ques- 
tions concerning  the  building,  its  contents,  the  interest  of  the 
insured  in  the  building,  etc.,  and  the  applicant  must  give  a 
truthful  answer  to  these  inquiries  in  order  to  hold  the  compa- 
nies responsible.  These  answers,  or  warranties,  are  made  a 
part  of  the  policy,  and  should  they  prove  untrue,  whether 
knowingly  false  or  not,  they  will  affect  the  validity  of  the 
policy,  provided  they  are  of  a  material  nature.  The  inten- 
tional withholding  of  facts  that  would  affect  the  risk  would 
also  render  the  contract  voidable;  that  is,  would  allow  the 
insurer  to  declare  it  void  should  loss  occur. 

142.  Proportion  of  Insurance  to  Value.  The  amount  for 
which  property  is  insured,  or  an  insurance  policy  is  written, 
merely  represents  the  maximum  amount  the  insurer  is  willing 
to  pay  should  a  loss  occur.  The  amount,  however,  is  the  sum 
on  which  the  premium  is  based,  and  should  only  a  partial  loss 
occur,  the  insured  is  the  loser  of  a  proportion  of  his  premiums. 
It  is  a  full  and  complete  protection  to  the  property  for  that 
amount,  and,  should  the  property  be  totally  destroyed,  the 
insured  would  receive  full  compensation.  But  if  only  a 
partial  loss  occurs,  the  insured  will  be  reimbursed  for  the 
actual  loss  as  ascertained  by  appraisers  after  the  fire.  The 
policy  will  continue  in  force  on  the  uninjured  portion  for  the 
amount  less  the  insurance  paid. 

Example :  If  a  man  insures  a  building  worth  $2,500,  for  $1,500, 
and  a  loss  occurs  amounting  to  $1,000,  the  insurance  company  can 
only  be  held  for  the  loss  of  $1,000,  and  the  remainder  of  the  policy 


208     A  FIRST  BOOK  IN  BUSINESS  METHODS 


would  be  in  force  for  $500.  Should  the  building  be  totally 
destroyed,  the  owner  will  suffer  a  loss  of  $1,000,  for  the  company 
cannot  be  compelled  to  pay  a  greater  amount  than  the  policy  calls 
for. 

Most  insurance  policies  contain  a  provision  that  the  insur- 
ers may  rebuild  the  building  destroyed  or  replace  a  stock 
rather  than  pay  the  cash,  value  of  the  loss  to  the  insured. 
Thus,  if  an  insurance  company  suspects  that  a  man  has 
burned  his  building  for  the  purpose  of  collecting  the  insur- 
ance, the  company  can  rebuild  at,  perhaps,  a  less  amount  than 
the  policy  called  for. 

Some  policies  require  that  the  owner  shall  exercise  due 
diligence  in  protecting  his  property  from  fire.  Thus,  if  the 
owner  should  discover  a  blaze  of  such  insignificant  propor- 
tions that  it  could  easily  be  extinguished,  and  should  fail  to 
extinguish  it,  though  fully  within  his  power,  and  the  property 
insured  should  be  destroyed,  the  owner  could  not  recover  from 
the  company,  because  of  his  failure  to  exercise  due  diligence. 
Should  the  owner  of  insured  property  injure  or  destroy  such 
property  in  attempting  to  save  it  from  destruction  by  fire, 
the  company  would  be  liable  for  such  injury.  So  the  insurers 
are  liable  for  loss  or  injury  sustained  by  the  blowing  up  of 
buildings  to  prevent  the  progress  of  fire,  but  not  for  a  loss 
which  cannot  be  directly  traced  to  the  fire. 

143.  Duration  of  Policies.  Policies  usually  run  for  one, 
two,  three,  or  five  years,  and  the  very  hour  of  day  on  which 
they  are  to  expire  is  indicated.  Policies  are  usually  written  to 
expire  at  twelve  o'clock  noon  by  standard  time.  Agents  of 
the  companies  usually  notify  the  insured  of  the  expiration  of 
the  policy  some  time  before  such  expiration.  Should  the 
insured  wish  to  renew  his  policy  in  the  same  company,  an 


PARTNERSHIP,  INSURANCE  209 


entirely  new  policy  is  written,  to  the  conditions  of  which  the 
insured  agrees. 

All  persons  buying  insurance  protection  should  read  their 
insurance  policies  before  accepting  them.  Many  more  con- 
ditions than  those  named  above  are  inserted  in  policies,  and 
one  should  be  careful  to  know  their  nature,  because,  on  the 
compliance  with  these  provisions  will  depend  the  ability  of 
the  insured  to  collect  the  amount  in  case  of  loss. 

QUESTIONS  ON  CHAPTER  XL 

7.     What  is  a  partnership  ? 
2.    What  may  the  several  partners  contribute  ? 
j.     Need  an  agreement  for  a  partnership  be  in  writing  ? 
4..     If  there  is  no  special  agreement  as  to  the  division  of 
profits,  how  are  they  divided  ? 

5.  Why  is  it  necessary  to  state  in  the  agreement  what 
length  of  time  the  partnership  is  to  last  ? 

6.  What  is  a  nominal  partner  ? 

7.  If  one  member  of  a  firm  dies,  does  that  dissolve  the 
partnership  ? 

8.  Are  the  acts  of  each  partner  binding  upon  the  firm  ? 
p.     How  may  a  partnership  be  dissolved  ? 

10.  Can  one  member  of  the  firm  withdraw  at  any  time  and 
thus  rid  himself  of  any  indebtedness  of  the  firm  ?  What  must 
first  be  done  ? 

//.  What  is  the  use  of  publishing  a  notice  of  dissolution 
of  a  partnership  ? 

12.    What  is  a  limited  partnership  ? 

ij.    What  is  meant  by  insurance  ? 

14..     How  many  kinds  of  insurance  are  there  ? 

75.    What  is  a  mutual  insurance  company? 

14 


210      A  FIRST  BOOK  IN  BUSINESS  METHODS 


16.    What  is  the  difference  between  a  mutual  insurance 
company  and  a  corporation  or  "  Old  Line  "  company? 
//.     What  is  meant  by  a  policy  ? 
1 8.    What  is  meant  by  a  premium  ? 
/p.     What  is  meant  by  an  open  policy  ? 

20.  What  is  meant  by  a  valued  policy  ? 

21.  May  a  person  have  property  which  is  not  his  own 
insured  ? 

22.  Are  policies  ever  written  for  the  full  value  of  the 
property  insured  ? 

23.  What  does  the  description  of  property  insured  include  ? 
24..     Is  it  necessary  to  notify  the  insurance  company  if  the 

premises  are  at  any  time  vacant  or  unoccupied  ? 

25.  Will  an  insurance  company  knowingly  insure  property 
for  its  full  value,  and  if  not,  why  ? 

26.  Write  a  letter  to  a  local  insurance  agent  telling  him 
that  you  desire  to  make  some  additions  to  your  building 
which  is  insured  in  his  company. 

GENERAL  REVIEW  EXERCISES 

/.    In  indorsing  checks,  what  form  of  indorsement  is  most 
frequently  used? 

2.    Name  two  other  kinds  of  indorsement, 
j.     Define  a  bill  of  exchange. 

4.  You  draw  a  draft  on  T.  J.  Whitman,  Nashville,  Tenn., 
for  amount  of  his  account,  and  the  draft  is  returned  to  you 
unpaid.     Write  him,  asking  for  an  explanation. 

5.  You  receive  a  letter  from  one  of  your  customers  in 
which  he  claims  that  the  goods  recently  received  from  you 
were  of  inferior  quality,  and  asks  for  a  rebate  of  $10.00.    Write 
a  polite  letter  in  reply  declining  to  grant  his  request. 


PARTNERSHIP,  INSURANCE  211 


6.  Give  an  example  of  stoppage  in  transit u. 

7.  What  is  the  difference  between  a  railroad  bill  of  lading 
and  a  railroad  expense  bill  ? 

8.  What  special  form  of  invoice  is  required  when  goods 
are  exported  to  Canada? 

9.  When  goods  are  exported  from  the  United  States,  a 
statement  must  be  furnished  by  the  shipper  showing  the  kind 
and  value  of  the  goods.     What  is  this  statement  called  ? 

10.  Of  what  use  is  this  statement  ? 

//.  Will  express  companies  undertake  the  collection  of 
accounts  ? 

12.     Is  that  a  good  way  to  make  collections  ? 

7j.     What  is  a  tenant  ? 

7^.  Why  is  it  necessary  that  a  lease  of  property  for  more 
than  one  year  be  in  writing  ? 

75.     What  is  the  person  called  who  gives  the  lease  ? 

16.    What  is  the  person  called  to  whom  the  lease  is  made  ? 

77.     What  is  a  guaranty  ? 

18.  You  sell  a  bicycle  to  Harry  G.  Smith.  Write  a  bill  of 
sale  for  him. 

7p.  Name  some  things  which  are  necessary  to  the  validity 
of  a  contract. 

20.  Name  some  contracts  which  would  not  be  binding. 

21.  Would  a  contract  made  by  a  drunken  person  be  bind- 
ing upon  him  ? 

22.  Name  some  cases  in  which  a  writing  is  necessary  to 
make  a  sale  binding  upon  both  parties. 

-27.  In  sales  of  what  amount  does  the  law  generally  require 
a  writing  ? 

24.  A  dealer  in  buggies  and  wagons  sells  a  wagon  for  $49.00 
to  a  farmer  who  promised  to  take  the  wagon,  but  no  money  was 
paid  down  and  no  written  contract  was  made ;  is  the  farmer 


212      A  FIRST  BOOK  IN  BUSINESS  METHODS 


obliged  to  take  the  wagon?  If  the  wagon  had  been  sold  for 
$60.00,  and  no  written  contract  was  made,  how  could  the  con- 
tract have  been  made  binding? 

25.  A  man  sells  goods  for  cash  and  the  buyer  cannot  at 
once  pay  cash  as  agreed ;  what  can  the  seller  do  ? 

26.  If  a  man  sells  goods  on  credit  and  the  buyer  fails  to 
pay  as  agreed,  can  the  seller  take  the  goods  back  without  the 
buyer's  consent  ?    What  can  he  do  ? 

27.  A  wholesale  dealer  sells  goods  and  ships  them  to  the 
purchaser  by  freight,  and  before  the  goods  reach  their  desti- 
nation the  seller  learns  that  the  buyer  is  bankrupt ;  can  he 
stop  the  goods,  and  if  so,  how  ? 

28.  What  is  stoppage  in  transitu  f 

29.  Is  a  railroad  company  obliged  to  hold  goods  when 
ordered  to  do  so  by  the  shipper  ? 

jo.    What  is  a  common  carrier  ? 

31.  Is  a  common  carrier  obliged  to  carry  any  and  all  goods 
offered  ? 

32.  Is  a  common  carrier  responsible  for  the  goods  while  in 
his  possession?     Suppose  the  goods  were  destroyed  by  fire, 
would  the  common  carrier  be  obliged  to  stand  the  loss  ? 

33.  Name  some  ways  in  which  a  partnership  can  be  dis- 
solved. 

34.  What  is  a  limited  or  special  partnership  ? 

jj*.     Can  persons  become  limited  partners  in  a  firm  simply 
by  agreeing  to  be  regarded  as  such  ? 


CHAPTER  XII. 


DEEDS,  MORTGAGES 

144.  Deeds.    When  a  person  buys  real  estate,  he  usually 
receives  from  the  person  selling  the  property,  a  deed,  which  is 
a  written  instrument  showing  that  the  title  to  or  interest  in  the 
property  has  been  transferred  from  the  seller  to  the  buyer ; 
and  before  the  deed  is  signed  and  delivered,  it  is  important 
to  the  seller,  as  well  as  to  the  buyer,  to  know  that  the  seller 
has  a  good  title  to  the  property.     This  is  a  matter  of  so  much 
importance  that,  as  a  rule,  the  title  should  be  examined  by 
some  one  who  has  a  thorough  knowledge  of  real-estate  law. 
It  is  better  to  employ  a  good  lawyer,  at  considerable  expense  if 
need  be,  than  to  have  any  uncertainty  in  reference  to  the  title. 

145.  Abstracts  of  Title.    The  person  who  expects  to  buy 
the  property  should  require  the  seller  to  furnish  him  with 
an  abstract  of  title,  as  this  is  of  the  utmost  importance    in 
determining  the  validity  of  the  title.     An  abstract  of  title  is 
a  brief  memorandum  taken  from  the  records,  and  showing 
the  history  of  the  title  from  the  United  States  Government 
to  the  date  of  the  examination.     Abstracts  of  title  are  gen- 
erally prepared  by  the  recording  officer  or  by  other  persons 
who  make  it  a  business  to  do  such  work.     The  seller  of  the 
property  should  also  furnish  the  purchaser  with  a  certificate 

[213] 


214      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXL. 


..\ 


o7WITNESSETH.  That  the  sajd  part/^f  the  first  part    tor  and  in  cooperation  of  the  sum  of 
-s.<l&eji/  ~&ttd:t4&i!ntMA~s.  *S/o.  2%fe**7^*^2<e<^...<??a««fc«a^z^/./^^.^^.^^<i/ 

•o.^^fe^*-.  io  h»nd  pa'd  by  the  said  parU££..of  the  second  part,  the  receipt  whereof  is  hereby  confessed 
and  acknowledged  do        .by  these preseots^grant,  bargain,  sell,  remise,  release,  alien  and  confirm  unto  tbe  said 

part vV.ot  the  second  part,  and.<2^r^Ji'...heirs  and  assigns,  FOREVER,  Att.^iCfeXLrj. -i-l~ 

certain  piece. .or  parcel. .of  Land,  situate  and  being  in  the 

State  of  Michigan..    rT~T~~ ..and  described  as  foUowKto-wil: 


Together  with  all  and  singular,  the  hered 
•ppertainingi  To  Have  and  to  Hold  the  said  premises, 
unto  the  said  pirt  .U  .of  the  second  part,  and  to. 


belonging  or 

with  the  appurtenance* 
***•  ««>  «"i«ns,  FOREVER.    And  the  sud 


Warranty  Deed 


DEEDS,  MORTGAGES 


215 


Form  CXLI. 

part^lof  the  first  part,^H^/^^^.-^....neirs,  executors  and  <$.M. 

covenant,  grant,  bargain  and  agree,  to  and  with  the  said  part^..  of  the  second  part..-;^^ heirs  and 

that  at  the  time  of  the  ensealing  and  delivery  of  theie  presents,  ...*&y..<^. well  seized  of  the 

granted  premises  in  Fee  Simple;  that  they  are  free  from  all  incumbrances  whatever;..- _. 

—  - -. _ and  that^.-iX7<fc...will-,  •nd..c5%£«£'...heirs,  executors. 


In  Witness  Whereof.  The  said  p'art/^.of  the 

»Ddi^and  seal:;! the  day  and  year  first  above  written. 


State  of  Michigan, 

Hl^&&U&UK 

the  vear  one  thousand  nine  Mndred 


-....shall  Warrant  and  Defend  the  same  against  all  lawful 


.in  and  for  said  County,  personally  appeared 


^£&^^...d.£^^ 


be  the   same   person.-^escribed   in   and    who   executed    the   within    instrument,    who 


kee  act  and  deed. 


t 

§ 

a 


Il? 

43* 


* 


2  f^HrJ     1 

»!«$]  ^ 

!  I  ii^  ® 

-tiijlh 
!f?53*. 


t; 


Warranty  Deed  (continued) 


216       A  FIRST  BOOK  IN  BUSINESS  METHODS 


from  the  proper  officer  showing  whether  or  not  all  taxes 
assessed  against  the  property  have  been  paid.  Abstracts  of 
title  are  not  furnished  in  many  of  the  older  states  where  the 
origin  of  the  titles  antedates  the  existence  of  the  United 
States  Government. 

In  looking  up  the  title,  the  records  of  the  various  instru- 
ments affecting  the  ownership  of  the  property  should  be 
carefully  examined,  and  if  there  have  been  any  mortgages, 
attachments,  liens,  or  tax-claims,  it  is  important  to  see  that 
they  have  all  been  properly  discharged. 

146.  Title  Guarantee  Companies.     In  many  of  the  larger 
cities  there  are  companies  who  will  undertake  the  examination 
of  titles,  and  will  issue  policies  guaranteeing  the  validity  of 
the  title.     A  guarantee  policy  is  a  binding  agreement  by  which 
the  company  undertakes  to  defend  at  its  own  expense  any 
litigation  against  the  title  insured  by  it.     These  companies 
employ  examiners  who  have  made  a  life  study  of  real-estate 
law,  and  after  they  have  examined  the  title,  and  the  policy  has 
been  issued  guaranteeing  the  validity  of  the  same,  the  policy 
holder  is  protected,  to  the  extent  of  the  amount  of  the  policy, 
by  the  company  from  any  losses  which  may  arise  if  the  title 
should  prove  to  be  imperfect. 

This  is  a  form  of  insurance  business  which  has  reached 
large  proportions  in  recent  years. 

147.  Parties  to  a  Deed.     The  person  selling  the  land  is 
called  the  grantor,  and  the  person  buying  it  is  called  the 
grantee.     In  order  to  have  the  deed  binding  upon  the  grantor, 
he  must  be  twenty-one  years  of  age  or  over,  and  be  of  sound 
mind.     It  is  not  necessary,  however,  that  the  grantee  be  of 
legal  age  or  of  sound  mind  in  order  to  make  the  deed  binding 
upon  the  grantor. 


DEEDS,  MORTGAGES  217 


The  laws  of  some  states  require  that  if  the  grantor  be 
a  married  man,  his  wife  shall  sign  the  deed  with  him,  for 
if  she  did  not  do  so  the  grantee  would  not  have  a  clear  title. 
The  grantor's  wife  would  still  have  an  interest  in  the  property, 
which  is  called  the  right  of  dower.  This  right  of  dower  is  the 
right  of  the  wife  to  use  a  portion  of  her  husband's  real  estate 
as  long  as  she  lives  after  her  husband's  death ;  and  if  she  sur- 
vives her  husband  she  may  immediately  institute  proceedings 
to  have  her  portion  of  the  real  estate  set  off  to  her  own  use 
during  the  remainder  of  her  life. 

If  the  grantor  of  the  deed  is  a  married  woman,  it  is  gener- 
ally necessary  that  her  husband  should  join  with  her  in  the 
execution  of  the  deed,  but  this  is  not  required  in  some  states. 

The  deed  should  be  written  or  printed,  or  it  may  be  partly 
written  and  partly  printed.  Blank  deeds  may  be  purchased  at 
almost  any  stationery  store.  It  is  much  better  for  the  ordi- 
nary person  to  use  a  printed  form,  because  they  have  been 
drawn  up  very  carefully  by  competent  lawyers. 

148.  Forms  of  Deeds.  Deeds  are  not  all  alike.  They  may 
be  general  warranty  deeds,  or  special  warranty  deeds,  or  quit- 
claim deeds.  But  a  purchaser  of  property  always  desires  a 
general  warranty  deed  if  he  can  get  it,  for  in  a  general  warranty 
deed  the  grantor  agrees  for  himself,  his  heirs,  executors, 
administrators,  and  assigns,  that,  at  the  time  of  the  ensealing 
of  the  deed,  he  is  lawfully  seized  of  the  premises  described  in 
the  deed,  that  they  are  free  from  all  encumbrance,  and  that 
he  will  warrant  and  defend  the  grantee  and  his  heirs  and 
assigns  against  all  lawful  claims  whatsoever. 

In  a  quit-claim  deed  the  grantor  simply  conveys  any  interest 
which  he  has  in  the  property  to  the  grantee.  He  does  not 
warrant  the  title  to  the  property,  nor  warrant  the  grantee 


218      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXLII. 

«$*BTO  ^ 

£ ...  .&.  .jt^.p&:J^S&lk/, 


ffeal 


_..«/  £7*toir«  County,  in  the  Statt  of  Indiana,, 

-*-£*CONVEY  AND  QUIT  CLAIM 


rrr.GYwHfy,  »>UA«  wo<e  tf^eaat^a^^. ^./«JT  M« 

sw?»  o/_.. j^-i^  ^^%gg^^  <a;<^/  J&erxtf^s^cst     pnrMKs, 

the  receipt  whereof  is  hereby  acknowledged,  the  follcuing  REAL  ESTATE,  in  Elkhart  County 
in  the  State  of  Indiana,  to-wit: 


STATE  OF  INDIANA,  ELKHART  COUNTY,  ss: 

Before  the  undersigned,  a  Notary  Public  in  and  for  said  County,  personally  came 


and  acknowledged  the  execution  of  the  annexed  Deed.        (^f- 

WITJfESS  my  hand  and  Notarial  Seal,  this  --  /£  -----  day  of 


. 

___Jfa^<2^^^ 


My  commission 


Quit  -Claim  Deed 


DEEDS,  MORTGAGES  219 

against  any  other  claims  to  the  property.     He  quits  his  claim 
to  it. 

149.  Special  Warranty   Deed.     A  special  warranty  deed 
covenants  and  warrants  only  against  the  acts  of  the  grantor 
and  those  claiming  under  him. 

150.  Signing1,  Sealing,  and  Delivery.    After  the  deed  is 
properly  drawn  it  is  ready  to  be  signed,  sealed,  and  delivered 
to  the  grantee. 

If  the  grantor  is  a  married  man,  his  signature  should  pre- 
cede that  of  his  wife.  If  either  of  them  is  unable  to  write, 
the  signature  may  be  made  by  a  mark  or  cross,  in  the  man- 
ner following  : 

Form  CXLIII. 

His 

JOHN    X     SMITH. 
Witness mark. 

The  laws  of  some  states  require  that  deeds  be  signed  by 
one  or  more  persons  as  witnesses  to  the  signature  of  the 
grantor,  but  in  others  no  witnesses  are  required. 

The  acknowledgment  is  the  act  of  admitting  before  a  justice 
or  notary  public  that  the  signatures  are  genuine  and  are  vol- 
untarily made.  The  notary  public  then  stamps  the  document 
with  his  official  seal  and  adds  his  written  signature.  This 
formal  signing  and  sealing  of  the  document  by  an  officer  of 
the  law  gives  a  certain  solemnity  and  validity  to  the  signa- 
tures of  the  grantor  and  grantee,  and  generally  no  other 
proof  of  the  execution  of  the  deed  is  required. 

In  some  states  it  is  necessary  to  have  a  paper  or  wax  seal 
affixed  to  the  instrument  in  order  to  make  it  legal,  while  in 
others  a  simple  scroll  of  the  pen  or  the  letters  L.  S.  are  all 
that  are  necessary. 


220      A  FIRST  BOOK  IN  BUSINESS  METHODS 


After  the  deed  is  signed,  sealed,  and  acknowledged,  it  must 
be  delivered  to  the  grantee.  This  is  absolutely  necessary, 
for  unless  the  deed  is  delivered  it  is  of  no  value,  even  after 
it  is  signed  before  witnesses,  and  sealed  and  acknowledged. 

The  delivery  of  a  deed  means  that  the  grantor  must  indi- 
cate by  acts  or  words,  or  both,  his  intentions  that  the  deed  be 
delivered  to  the  grantee.  The  grantor  may  direct  the  grantee 
to  take  the  deed  lying  upon  the  table,  and  if  the  grantee  takes 
it  there  will  be  a  good  delivery,  and  if  the  grantor  throws  the 
deed  upon  the  table  with  the  intention  that  the  grantee  shall 
take  it,  though  nothing  be  said  to  indicate  the  intention,  it 
will  be  a  good  delivery. 

A  man  may  make  a  deed  for  a  piece  of  land  which  has 
already  been  paid  for.  and  intend  to  deliver  it  at  the  first 
opportunity,  but  if  he  dies  before  doing  so  the  deed  is  of  no 
effect.  A  deed  taken  from  a  grantor  by  fraud,  deceit,  or  com- 
pulsion is  voidable. 

151.  Deed  in  Escrow.     A  deed  is  sometimes  delivered  in 
escrow,  which  means  that  it  is  deposited  with  a  third  party  to 
be  by  him  delivered  to  the  grantee  when  certain  conditions 
have  been  fulfilled  or  certain  time  has  elapsed.     When  these 
conditions  have  been  fulfilled  and  the  deed  is  turned  over  to 
the  grantee,  it  takes  effect  upon  his  receiving  it,  the  same  as 
though  the  grantor  had  delivered  it  to  him  personally. 

152.  Recording    of    Deeds.      As    soon    as    the    grantee 
receives  his  deed  he  should  have  it  recorded.     If  he  did  not 
do  so,  the  grantor,  if  he  were  dishonest,  might  sell  the  land 
to  some  one  else,  and  if  the  subsequent  purchaser  bought  it  in 
good  faith  and  his  deed  were  placed  on  record  first,  his  title  to 
the  property  would  probably  be  good.     If  the  subsequent  pur- 
chaser had  notice  or  knowledge  of  the  unrecorded  deed,  his 


DEEDS,  MORTGAGES  221 


title  would  not  be  good,  even  if  he  had  paid  full  value  for  the 
land.  But  uncertainties  are  never  safe,  and  in  business  mat- 
ters prompt  attention  to  details  is  of  the  utmost  importance. 
In  every  county  of  the  United  States  there  is  a  public 
office  for  the  recording  of  deeds  and  mortgages,  and  usually 
this  office  is  at  the  county  court  house.  To  have  the  deed 
recorded,  the  grantee  takes  it  to  the  registrar  of  deeds,  who 
makes  an  exact  copy  of  the  deed  in  a  book  kept  for  that 
purpose.  After  the  deed  has  been  recorded  the  grantee  may 
have  it  returned  to  him  again.  The  cost  of  having  the  deed 
recorded  is  usually  paid  by  the  grantee,  and  the  cost  of  draw- 
ing the  deed  and  having  it  acknowledged  before  a  notary 
public,  is  paid  by  the  grantor. 

153.  Trust  Deeds.  A  trust  deed  is  used  to  convey  prop- 
erty for  the  use  of  some  other  person  who  is  entitled  to  the 
proceeds,  profits,  or  use  of  the  property.  Trust  deeds  are 
very  often  used  as  a  means  of  securing  the  payment  of  a  debt, 
or  the  fulfillment  of  an  obligation  in  the  nature  of  a  debt, 
and  in  some  states  they  have  entirely  superseded  mortgages. 
Instead  of  giving  a  mortgage  to  secure  the  payment  of  a 
debt,  property  is  deeded  to  a  third  person  called  a  trustee,  who 
becomes  the  agent  for  both  parties,  and  he  must  perform  his 
duties  with  strict  impartiality.  The  deed  specifies  the  nature 
of  the  debt  or  obligation  intended  to  be  secured,  and  it  some- 
times confers  upon  the  trustee  the  power,  in  case  the  debt  or 
obligation  is  not  paid,  to  sell  the  property  and  pay  the  debt 
out  of  the  proceeds,  but  in  many  states  such  a  power  is  con- 
trary to  law.  This  deed  is,  in  substance  and  effect,  a  mortgage. 

As  a  general  rule,  the  grantor  in  a  trust  deed  is  entitled 
to  the  rents  and  profits  of  the  property  therein  described 
until  foreclosure  unless  otherwise  stipulated  in  the  deed. 


222      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Upon  the  payment  of  the  indebtedness  secured  by  a  trust 
deed,  it  becomes  the  duty  of  the  trustee  to  execute  an  instru- 
ment called  a  release  deed,  which,  when  recorded,  discharges 
the  lien  created  by  the  trust  deed. 

The  forms  of  trust  deeds  used  in  the  various  states  are 
quite  different,  and  so  also  are  the  laws  regarding  the  execu- 
tion and  recording  of  the  deed ;  and  if  sale  of  the  property  is 
made  by  the  trustee,  it  must  be  done  strictly  in  accordance 
with  the  laws  of  the  state  in  which  the  property  is  located. 

The  following  shows  a  simple  form  of  a  trust  deed : 

Form  CXLIV. 

THIS  INDENTURE  WITNESSETH,  THAT  THE  GRANTOR.  . , of  the in  the  County  of 

and  State  of. . .  for  and  in  consideration  of  the  sum  of Dollars,  in  hand  paid,  Convey  ..and  Warrant. . 

to of  the County  of and  State  of...  the  following  described  Real  Estate,  to  wit: 

situated  in  the  County  of ,  in  the  State  of ,  hereby  releasing 

and  waiving  all  rights  under  and  by  virtue  of  the  Homestead  Exemption  Laws  of  the  State  of ,  and 

all  right  to  retain  possession  of  said  premises  after  any  default  in  payment  or  a  breach  of  any  of  the 
covenants  or  agreements  herein  contained,  in  trust,  nevertheless,  for  the  following  purposes : 

WHEREAS,  The  said Grantor,  .herein justly  indebted  upon Promissory  Note.., bearing 

even  date  herewith,  payable  to  the  order  of 


Now,  If  default  be  made  in  the  payment  of  the  said  . .  .Promissory  Note  . ,  or  of  any  part  thereof, 
or  the  interest  thereon,  or  any  part  thereof,  at  the  time  and  in  the  manner  above  specified  for  the  pay- 
ment thereof,  or  in  case  of  waste,  or  non-payment  of  taxes  or  assessments  on  said  premises,  or  ot  a 
breach  of  any  of  the  covenants  or  agreements  herein  contained,  then  in  such  case  the  whole  of  said 
principal  sum  and  interest,  secured  by  the  said — Promissory  Note.  ..shall  thereupon, at  the  option  of 
the  legal  holder  or  holders  thereof,  become  immediately  clue  and  payable  ;  and,  on  the  application  of 
the  legal  holder  of  said  Promissory  Note. .,  or  either  ot  them,  it  shall  be  lawful  for  the  said  grantee, or 
his  successor  in  trust,  to  enter  into  and  upon  and  take  possession  of  the  premises  hereby  granted,  or 
any  part  thereof,  and  to  collect  and  receive  all  rents,  issues  and  profits  thereof;  and,  in  his  own  name 
or  otherwise,  to  file  a  bill  or  bills  in  any  court  having  jurisdiction  thereof  against  the  said  party  of  the 
first  part, heirs,  executors,  administrators  and  assigns,  to  obtain  a  decree  for  tne  sale  and  convey- 
ance of  the  whole  or  any  part  of  said  premises  for  ttie  purposes  herein  specified,  by  said  party  or  the 
second  part,  as  such  trustee  or  as  special  commissioner,  or  otherwise,  under  order  of  court,  and  out  of 
the  proceeds  of  any  such  sale  to  first  pay  the  costs  of  such  suit,  all  costs  of  advertising,  sale  and  con- 
veyance, including  the  reasonable  fees  and  commissions  of  said  party  of  the  second  part,  or  person 

who  may  be  appointed  to  execute  this  trust,  and  Dollars  attorney's  and  solicitor's  fees,  and  also 

all  other  expenses  of  this  trust,  including  all  moneys  advanced  for  insurance,  taxes  and  other  liens  or 
assessments,  with  interest  thereon  at  seven  per  cent,  per  annum,  then  to  pay  the  principal  of  said 
note..,  whether  due  and  payable  by  the  terms  thereof  or  the  option  of  the  legal  holder  thereof,  and 
interest  due  on  said  note.. up  to  the  time  of  such  sale,  rendering  the  overplus,  if  any,  unto  the  said 

party  of  the  first  part, legal  representatives  or  assigns,  on  reasonable  request,  and  to  pay  any  rents 

that  may  be  collected  after  such  sale  and  before  the  time  of  redemption  expires,  to  the  purchaser  or 
purchasers  of  said  premises  at  such  sale  or  sales,  and  it  shall  not  be  the  duty  of  the  purchaser  to  see  to 
the  application  of  the  purchase  money. 

WHEN  The  said  note. .  and  all  expenses  accruing  under  this  Trust  Deed  shall  be  fully  paid,  the  said 
grantee  or  his  successor  or  legal  representatives  shall  re-convey  all  of  said  premises  remaining  unsold 

to  the  said  grantor    or heirs  or  assigns,  upon  receiving  bis  reasonable  charges  therefor     In  case  of 

the  death,  resignation,  removal  from  said County,  or  other  inability  to  act  of  said  grantee    

"  made  successor  in  trust  herein,  with  like  power  and 
. .  shall  pay  all  costs  and 
said  note        in  any  suit  in 

which  either  of  them  may  be  o'dihtiff  or'defendant,  by  reasou  of  being  a  party  to  this  Trust  Deed,  or  a 
holder  of  said  note..,  and  fch&'J  the  same  shall  be  a  lien  on  said  premises,  and  maybe  included  in  any 
decree  ordering  the  sale  of  laid  premises  and  taken  out  of  the  proceeds  of  any  sale  thereof. 

WITNESS,  The  hand  ..  and  seal of  the  said  grantor — ,this day  of A.  D.  190.. 

[SKAL] 

• [SEAL] 


the  death,  resignation,  removal  from  said County,  or  other  inability  to 

then of  said.   ..    is  hereby  appointed  and  made  successor  in  trust  her 

authority,  as  is  hereby  vested  in  said  grantee.    It  is  agreed  that  said  grantor, 
attorney's  fees  incurred  or  paid  l"y  said  grantee  or  the  holder  or  holders  of  BJ 


DEEDS,  MORTGAGES  223 


154.  Mortgages.  A  mortgage  is  a  conveyance  of  the  title 
of  property,  either  personal  or  real,  given  to  secure  the  pay- 
ment of  a  debt,  or  as  a  guaranty  for  the  performance  of  some 
special  duty.  When  the  debt  is  paid  or  the  duty  performed 
the  mortgage  becomes  void. 

Example :  Suppose  a  person  buys  a  farm  but  is  not  able  to 
pay  the  whole  amount  of  the  purchase  price  ;  in  order  to  secure 
the  payment  of  the  balance,  he  gives  a  mortgage  on  the  farm.  Or 
suppose  he  borrows  some  money,  and  as  security  for  its  payment 
he  gives  a  mortgage  on  his  team  of  horses.  When  the  money 
which  was  borrowed  has  been  repaid,  principal  and  interest,  the 
mortgage,  after  it  has  been  discharged,  is  of  no  value.  (See  §  157.) 

Form  CXLV. 


Note  Secured  by  Mortgage 

155-  Forms  of  Mortgage.  If  a  person  borrow  money,  the 
payment  of  which  he  proposes  to  secure  to  the  lender  by  giv- 
ing a  mortgage,  a  note  is  usually  given  in  which  he  promises 
to  pay  the  debt,  and  the  mortgage  is  given  to  secure  the  pay- 
ment of  the  note.  The  note  is  quite  like  any  other  prom- 
issory note,  except  that  when  it  is  secured  by  a  mortgage 
this  fact  is  stated  in  the  note.  This  note  accompanying  a 


224     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXLVI.  (a) 


k>^.C2^  __ 


together  with  all  tene 

ment  of  the  sum 

with  mterest  at  the  rate  of 


and  appurtenances  thereunto  belonging,  to 


the  re-pay- 
Dollars. 


percent  per  annum,  payable  annually..' 

her  the  date  hereof, 


according  to  the  conditions  ot.02i£.  .  .certain  feZ~£&£ti&&&!y  J2&£&/.bezttng  even  date  herewith. 

of  the  second  part,  to  which  these  presents  are  collateral,  and  also  to  secure  the  fulfillment  of  the  folding 
agreements  on  the  part  of  said  pan/fit  of  the  first  part,  made  in  consideration  of  said  sum  of  money,  the 
receipt  of  which  is  hereby  acknowledged,  viz.: 

It  it  Agreed,  That  if  the  interest.!. , above  stipulated  to  be  paid. 

shall  remain  unpaid  for  the  space  of, X<3 days",  after  the  same  shall  fall  due,  the  whole  amount  of 

principal,  viz.:.C?(?%C^2^2<^«r*«t...z ^ Dollars. 

is  well  as  said  interest,  shall  thereupon  become  due  and  payable  forthwith,  notwithstanding  the  time  first 
ibove  limited  for  the  payment  of  said  principal  shall  not  then  have  expired. 

It  is  Agreed,  That  said  parUAzof  the  first  part  shall  pay  all  taxes  and  assessments  which  shall  be 
levied  on  said  premises  whenever  the  same  shall  be  payable,  and  in  case  said  part^.of  the  second  part  shall' 
pay  the  same,  the  amount  so  paid  shall  be  a  lien  on  said  premises,  secured  hereby  and  payable  forthwith, 
with  interest  at  the  rate  of  *S>  per  cent,  per  annum 

It  i»  Ayreed,  That  should  aov  proceeding  be  taken  to  foreclose  this  mortgage,  said  first  part  j^j? 
shall  pay  to  said  second  party..  SeiOZMtfef-fa^...  — ^ —  '..  .„_'.  ..dollars,  Attorney  Fee 


Mortgage 


DEEDS,  MORTGAGES 


225 


Form  CXLVI.  (b) 


It  Is  Fartftur  I&cpresaly  Agreed,  By  and  between  the  parties  hereto,  that  the  said  part^of  the 
first  part  shall  and  will  keep  the  buildings  erected  and  to  be  erected  upon  the  lands  above  conveyed,  insured 
against  loss  and  damage  by  fire,  in  an  amount  and  by  insurers  approved  by  said  party__of  the  second  part 
and  assign  the  policy  and  certificates  thereof  to  the  said  part«.of  .the  second  part,  and  in  default  thereof. 
the  whole  amount  of  the  principal,  va..^iLLC^&^f<ha^i^L/  __ 
Dollars,  as  well  as  the  interest  thereon,  shall  thereupon  become  due  and  payable  forthwith,  at  the  option  of 
the  said  party,  of  the  second  part,  notwithstanding  the  time  first  above  limited  for  the  payment  of  said 
principal  shall  not  then  have  expired. 

Upon  default  being  made  in  any  agreement  herein,  or  in  case  of  non-payment  of  said  sum  ot 
i.  _______________  .....  ______  Dollars,  or  the  interest. 


or  any  part  thereof,  at  the  time,  place,  and  in  the  manner  above  specified,  it  shall  be  lawful  for  sai 
of  the  second  part,.  r^^TT  .....  heirs,  executors,  administrators  or  assigns,  and  said  partf^of 

part,  &oflt^fJ>^-  empower  said  parttyof  the  second  part,.  ^U/t^  _____  heirs,  executors,  administrators 

or  assigns,  to  grant,  bargain,  sell  anoVonvey  said  premises  at  public  vendue.  and  on  said  sale,  to  make  and 
execute  to  the  purchaser,  his  heirs  and  assigns,  forever,  good-and  sufficient  deeds  of  conveyance,  pursuant  to 
the  Statute,  rendering  the  surplus  money,  (if  any  there  should  be),  to  said  part^of  the  first  par7/^£*t. 
heirs,  executors  or  administrators,  after  deducting  the  amount  then  due,  said  attorney  fee.  and  the  costs 
and  charges  of  said  vendue. 

In  Witness  Whereof,Sztd  pzityyol  the  first  part  haWhereunto  set.T^C^i.  .......  hand.^. 

ana  seaU*.,  thi?  ----  /$*£  .....  day  rf  .  _Z2&Utf*£s.  .....  in  the  year  one  th 

hundr 

SI 

-- 

STATE  Q|uMicHiGAN. 

Count 

Before  me.  the  subset  .  &!_  ¥  _  . 

JactJt*. 
_  ---  ....  ---  .....  ----  .  .  .  ___  ....__..       _  .  .  .  ___  in  and  for  9M«t  County. 

this  :  r^r^-.  /.&£.  .rrrrr:  -.  -day  of.  3ff&ndi±  .  .—.-.-  .  A.  D/^.42  personally  appeared 

^ 

known  to  me  to  be  the  person^.  described  in  and  who  executed  the  above  Mortgage,  and  _ 
acknowledged  the  execution  thereof  to  beTtft&Sb.  .frec^act  and  deed. 


15 


Mortgage  (continued} 


226      A  FIRST  BOOK  IN  BUSINESS  METHODS 


mortgage  is  really  a  part  of  the  mortgage,  and  in  case  of 
doubt,  each  may  be  used  to  explain  the  meaning  of  the  other. 

A  mortgage  is  similar  to  a  deed  except  that  there  is  an 
additional  clause  called  the  defeasance,  which  provides  that  if 
the  grantor  pays  a  certain  sum  of  money  the  mortgage  shall 
be  void. 

A  mortgage  on  real  estate  is  called  a  real  estate  mortgage, 
and  a  mortgage  on  personal  property  is  called  a  chattel  mort- 
gage. The  man  who  mortgages  his  property  is  called  the 
mortgagor,  and  the  man  in  whose  favor  the  mortgage  is  made 
is  called  the  mortgagee. 

156.  Recording  of  Mortgages.  When  real  estate  is  mort- 
gaged the  mortgage  must  be  properly  acknowledged,  signed, 
sealed,  and  witnessed,  like  a  deed,  before  a  notary  public  or 
other  legal  officer.  Like  a  deed,  too,  the  mortgage  must  be 
recorded.  A  mortgage  on  real  estate  should  be  recorded 
in  the  office  of  the  registrar  or  recorder  of  deeds  at  the 

Form  CXLVII. 

CHATTEL  MORTGAGE  NOTE. 


1JP  *  _  I 

after  date  for 

Value  Rcceiucd,  pro, 

nise  to  pay  to  the 
the 

Order  of                         .                                               

sum  of 

DOLLARS, 

at      .                           with 

interest  thereon 
annually. 

at  the  rate  of                per  cent  per  annum,  payable 

This  note  is  secured  by  a  Chattel  Mortgage  to 

of  even 

date  herewith,  on  personal  property  in 

,  and 

is  to  bear  interest  at  the  rate  of  per  cent  per  annu 

no. 

m  after  

Form  for  a  Chattel  Mortgage  Note 


DEEDS,  MORTGAGES  227 


county-seat,  and  a  chattel  mortgage  is  recorded  in  the  same 
place,  or  in  such  other  office  as  the  law  directs.  The  laws  of 
the  different  states  vary  somewhat  in  reference  to  the  record- 
ing of  chattel  mortgages,  and  they  are  frequently  required  to 
be  recorded  in  the  office  of  the  township  or  city  clerk. 

When  a  married  man  gives  a  mortgage  on  real  estate  to 
secure  the  payment  of  a  note,  his  wife  should  sign  the  mort- 
gage with  him,  as  is  required  by  law  in  some  states,  but  she 
need  not  sign  the  note.  In  most  states  where  the  law 
requires  that  a  wife  shall  sign  with  the  husband  in  giving  a 
mortgage,  it  is  not  necessary  to  have  her  signature  in  cases 
where  the  mortgage  is  given  to  secure  a  part  of  the  purchase 
price  of  the  property. 

157.  Payments  on  Mortgages.  A  person  who  loans 
money  and  takes  as  security  for  its  payment  a  mortgage  on 
buildings  which  are  insured  against  fire,  should  see  that 
the  insurance  policy  is  made  in  his  favor,  so  that  in  case  the 
buildings  are  destroyed  by  fire  the  owner  of  the  property 
could  not  collect  the  money  on  the  insurance  policy  and  leave 
the  land  only  as  security  for  the  money  borrowed. 

When  a  part  payment  is  made  for  the  money  borrowed, 
the  amount  paid  is  indorsed  on  the  note.  When  a  payment 
is  made  on  a  mortgage  which  is  not  sufficient  to  pay  the 
whole  debt,  it  is  first  applied  to  the  payment  of  the  interest 
due  and  the  balance  is  to  be  applied  on  the  principal. 

When  the  whole  amount  has  been  paid  it  is  the  duty  of  the 
mortgagee  to  have  the  mortgage  discharged.  Sometimes  this 
is  done  by  giving  a  satisfaction  of  mortgage  (see  Form  CXLVIIL), 
which  the  mortgagor  takes  to  the  registrar's  office  and  has 
placed  on  record  to  show  that  the  mortgage  has  been  paid. 
Sometimes  the  mortgagee  has  the  mortgage  discharged  by 


228      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXLVIII. 


OF  MORTGAGE. 


inoui  all  PECW  t>g  Qhest  presents, 


.—  :.  and  State  of. 

Do  Hereby  Certify,  That  a  certain  Indenture  .^Mortgage  bearing  date  the 
day  <*:.&.£&Ci^tnSU  ......  ......one  thousand  eight  hundred 

made  and  executed  ty  _.&_ 


of  the  first  part,  to . 

of  the  second  part,  and  recorded  in  thi-Kcgister's  oflfce  for  the  Counsel 

in  Liber  '        .  ./.(?  ":.      ;.    ..    of  Mortgages,  on  Vtff>.~^f..'7.jG.~~  on  the .... 
day  of  <2).jesfc&43&fa4>..  on«  thousand  eight  hundred 


In  Witne*«  Whereof, 
day  of 


r^_ 1 is  folly  paid,  satisfied  and  t 

'1/L. hereunto set../?****  hand...and seal,    the .^ 

hundradi 


STATE  £F/fcCHIOAN.     ) 

County  of    d^ttj^^      .    J*   On  this 5&J&. day  of .. 

.- .: before  me,  a :'_. 

....  in  and  for  said  County,  personally  came  the  above  i 

^^^^L^a^t^g^a^.^:.^ 


known  tojne  to  be  the  person . .  named  in  and  who  executed  the  above  Instrument,  and  acknowledged 
_      -3& executed  the  same  for  the  intents  and  pnrBOges  therein  mentioned. 


Satisfaction  of  Mortgage 


DEEDS,  MORTGAGES  229 


going  to  the  office  where  the  mortgage  is  recorded  and  signing 
on  the  margin  of  the  recorded  mortgage  a  statement  showing 
that  the  mortgage  has  been  paid. 

158.  Assignment  of  Mortgages.     A  mortgage  may  be 
sold  like  any  other  property.    Suppose  a  person  holds  a  mort- 
gage which  is  not  yet  due  and  he  wishes  to  use  the  money ; 
he  may  sell  it  to  some  one  else  and  let  him  hold  it  until  it 
becomes  due.     In  order  to  transfer  his  title  to  it  he  must 
make   what  is  called   an  assignment  of  mortgage  (see   Form 
CXLIX.),  and  this  assignment  should  be  recorded  the  same 
as  a  mortgage. 

159.  Redemption  of  a  Mortgage.     It  used  to  be  the  rule 
that  if  the  mortgagor  did  not  pay  the  debt  when  it  became 
due,  he  lost  the  property  which  he  had  mortgaged,  and  could 
not  redeem  it,  no  matter  how  small  the  debt  was  or  how 
valuable  the  property  which  he  had  mortgaged.     If  he  did 
not  pay  exactly  on  the  day  the  debt  was  due  or  before,  he 
could  not  pay  it  afterwards.     But  now  the  law  is  more  leni- 
ent, and  a  mortgagor  always  has  a  period  of  time  for  redeem- 
ing his  property  by  paying  the  entire  debt  which  has  been 
secured  by  the  mortgage,  with   all  interest  and  expenses. 
Lenders  foreclose  mortgages  less  often  than  one  would  sup- 
pose.    If  the  interest  is  promptly  met,  many  lenders  are  con- 
tent to  let  the  mortgage  run  as  an  investment. 

160.  Equity  of  Redemption.     This  right  to  redeem  the 
property  is  called  an  equity  of  redemption,  and  it  continues 
until  it  is  extinguished  by  the  foreclosure  of  the  mortgage 
and  a  failure  to  redeem  within  the  time  provided  by  law. 
When  default  is  made  in  the  payment  of  principal  or  interest 
the  mortgagee  may  foreclose  the  mortgage,  which  is  a  proceeding 


230     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Form  CXLIX. 


all  |£jett  fcg  these  foments, 


of  the  first  part,  for  and  in  consideration  of  the  sum  of. 


of  the  United  States  of  JUnerica,Ur5^..<?#^. 


........  in  hand  paid  by 


' 


.. 

of  the  seconcfpiftt,  »t  or.  before  the  ensealing  or  defivery  of  these  presents,  the  receipt  whereof  is  hereby 
acknowledged,  have  granted,,  bargained,  sold,  assigned,  transferred  and  set  over,  and  by  these  present*  do  grant, 
bargain,  sell,  assign,  transfer  and  set  over  unto  the  said  part.C?r..of  the  second  part,  a  certain  Indenture  of 
Mortgage,  bearing  date  the  ........  g?/£.  ...............  day  of  ....^»kifew*<£fc*<  ......  one  thousand  eight 


hundred  *v&9Mn£&f./ttt?tAj_  _______  made  .....  .  .... 

>3uwi44tt  *&. 

* 


„____ — _ _..„ and  recorded  in  the  Register1* 

Office  for  the  County  of ..  j^^5Z^^\.±Z7..  .  ..State  of  Michigan,  in  Liber .  ~*£/ „  of 

Mortgages,  at  Page.  vTy7/  •-•• with  *"  and  sinenlar  the  P"™ises  'herein  mentioned  and  described,  to- 
gether with  the...%0^fc....  ...or  obligation  therein  also  mentioned,  and  the  moneys  now  due,  and  the  interest 

that  ma'y  hereafter  grow  due  thereon;  To  Have  and  to  Hold  the  same  unto  the  said  part.y..of  the  second 

part,        .tT^fcg heirs  and  assigns,  FOREVEB,  subject  only  to  the  proviso  in  the  said  indenture  of 

Mortgage  mentioned.    And^c?* do  hereby  authorize  and  appoint  the  said  partQfr  df  the  second  part, 

OftM ;._..trne  and  lawful  attorney,  irrevocable  in.  ff?f<u.  .  name  or  otherwise,  buYat^&K...  proper  costo 
and  charges,  to  have,  use  and  take  all  lawful  ways  and  means  for  the  recoveryof  the  sum  or  sums  of  money  now 
due  and  owing,  or  hereafter  to  become  due  and  owing,  upon  the  8aid..CZ«&...._."  ."_  ..and  mortgage;  and 

in  case  of  payment  to  give  acquittance  or  other  sufficient  discharge,  as  fully  as..  ^.. might  or  could  do  if 

these  presents  were  not  made;  and ...«/ do  hereby  for#^£<*/ heirs,  executors  and 


>  and  with  the  said  partft#;..of  the  second  part,  that  there  is 
.......  due  «M' 


^£r|}^*W.-x*^..-^^ 


Mortgage  the 


•nd  that  -Z2  _    haKlgood,  rightand  lawful  authority  lo  grant,  bargain  and  sell  the  same  in  manner  aforesaid. 
fto^d  and' Delivered  *v^_ %£.£ ,  "^  '         '       '  — 


teethe  year  one  thoosandl^ hundred  and...-^UOt....... ~ before  me^  the  subscriber,  a 

"o^.-Q/tt^feL...:.,  .„......,. *  ««1  f»'  ^d  County,  personally  appeared 


Sferf, 


to  me  known  to  be  the  same  perepn-describid  in  and  who  executed  Of/ within  Instrument,  who 

acknowledge  '  the  same  to  be...!WZ  J. free  act  and  deed. 


Assignment  of  Mortgage 


DEEDS,  MORTGAGES  231 

in  a  proper  court  by  which  the  property  described  in  the  mort- 
gage is  sold  to  pay  the  debt  thereby  secured.  In  some  states, 
after  the  foreclosure  of  the  mortgage  and  a  sale  of  the  prop- 
erty, there  is  a  further  period  of  redemption,  varying  from 
sixty  days  to  six  years. 

The  mode  of  foreclosure  differs  in  the  several  states.  Gen- 
erally a  foreclosure  of  the  mortgage  includes  a  sale  of  the 
mortgaged  property,  which  is  done  under  the  direction  of  an 
officer  of  the  court.  The  proceeds  from  the  sale  of  the  prop- 
erty are  used  to  pay  the  mortgage  debt  and  the  interest,  and 
if  there  is  anything  left  it  is  turned  over  to  the  mortgagor, 
whose  rights  to  the  property  are  then  entirely  cut  off. 

QUESTIONS  ON  CHAPTER  XII. 

/  How  is  the  title  of  land  conveyed  from  one  person  to 
another  ? 

2.    What  is  an  abstract  of  title  ? 

j.     Where  may  an  abstract  of  title  be  had? 

^.     What  is  a  deed  ? 

5.  Who  is  the  grantor  in  a  deed? 

6.  What  is  the  person  buying  the  property  called  ? 

7.  If  a  man  sell  a  piece  of  real  estate,  is  it  necessary  that 
his  wife  sign  the  deed  ? 

8.  If  a  woman  sell  a  piece  of  real  estate,  is  it  necessary 
that  her  husband  sign  the  deed  with  her  ? 

p.     What  is  meant  by  "right  of  dower"? 

10.     What  is  a  general  warranty  deed  ? 

//.     What  is  a  quit-claim  deed  ? 

12.  If  you  were  going  to  purchase  a  farm  or  a  house  and 
lot,  which  would  you  prefer  —  a  warranty  deed  or  a  quit-claim 
deed?  Why? 


232      A  FIRST  BOOK  IN  BUSINESS  METHODS 


7j.  If  a  man  who  sells  a  piece  of  real  estate  is  unable  to 
write,  how  can  he  sign  the  deed  ? 

14.     How  many  witnesses  are  required  to  a  deed  ? 

75.  After  the  deed  is  drawn,  what  is  the  next  thing  to  be 
done? 

1 6.    What  is  meant  by  the  acknowledgment  of  a  deed? 

77.     Where  should  a  deed  be  recorded  ? 

1 8.    Whose  duty  is  it  to  have  the  deed  recorded  ? 

7p.     What  is  the  object  in  having  a  deed  recorded? 

20.  Who  pays  the  cost  of  having  the  deed  recorded  ? 

21.  What  becomes  of  the  deed  itself? 

22.  What  is  meant  by  the  delivery  of  a  deed  ? 

23.  If  a  married  man  sell  real  estate,  and  his  wife  does  not 
unite  with  him  in  executing  the  deed,  what  consequences 
may  follow? 

24.  What  is  a  mortgage  ? 

25.  What  is  a  chattel  mortgage  ? 

26.  Who  is  the  mortgagee ?    Who  is  the  mortgagor? 

27.  Is  it  necessary  to  have  a  mortgage  recorded? 

28.  Is  a  note  usually  given  with  a  mortgage? 

29.  If  part  payment  is  made  of  the  amount  due,  is  the 
indorsement  made  on  the  note  or  on  the  mortgage  ? 

jo.  What  is  an  assignment  of  mortgage?  What  is  meant 
by  foreclosure? 

j7.     Where  should  a  real  estate  mortgage  be  recorded  ? 

j2.     What  is  a  discharge  of  mortgage  ? 

jj.     What  is  meant  by  equity  of  redemption? 

34..  If  the  amount  due  on  a  mortgage  is  $1,200  and  the 
property  is  sold  for  $1,800  by  the  mortgagee,  what  becomes 
of  the  balance  ? 

jj.     Name  two  ways  of  having  a  mortgage  discharged: 

j6.    Where  should  a  chattel  mortgage  be  recorded  ? 


DEEDS,  MORTGAGES  233 


GENERAL  REVIEW  EXERCISES 

/.  Give  an  example  showing  where  it  would  be  necessary 
to  make  an  assignment  of  an  account. 

2.  You  wish  to  draw  a  draft  on  E.  D.  Matthews  who  lives 
in  Cedar  Rapids,  Iowa,  and  who  owes  you  $50.75.  In  whose 
favor  would  you  draw  the  draft? 

j.  What  is  the  difference  between  a  silent  partner  and  a 
nominal  partner? 

^.  What  is  meant  by  "  Ltd."  placed  after  a  firm  name,  as 
Brown,  Wilson  &  Co.,  Ltd.? 

5.  What  is  the  difference  between  a  copartnership  and  a 
stock  company  ? 

6.  What  is  the  difference  between  a  mutual  insurance 
company  and  an  "  Old  Line"  company? 

7.  What  is  a  board  of  trade  ? 

8.  What  is  a  certificate  of  stock  ? 

p.  What  is  the  difference  between  common  stock  and  pre- 
ferred stock  ? 

10.  What  are  coupon  bonds  ? 

11.  Is  there  any  difference  between  a  board  of  trade  and 
a  stock  exchange  ? 

12.  When  a  mortgage  is  paid  in  full  and  the  mortgage 
and  note  are  turned  over  to  the  mortgagee,  does  that  dis- 
charge the  mortgage  ? 

ij.  Name  two  methods  used  for  discharging  a  mortgage 
when  payment  has  been  made  in  full. 

14.  Is  it  necessary  to  have  a  discharge  of  mortgage 
recorded  ? 


CHAPTER   XIII. 

UNITED  STATES  LAND  SURVEYING 

161.  Surveying  Meridians.  In  surveying  the  public  lands 
of  the  United  States,  lines  are  established  at  different  points, 
some  running  north  and  south,  which  are  called  surveying 
meridians,  meridian  lines,  or  principal  meridians,  and  some  run- 
ning east  and  west,  at  right  angles  to  the  meridian  lines, 
which  are  called  base  lines. 

These  meridian  and  base  lines  are  shown  upon  the  large 
maps  of  the  United  States,  published  by  the  General  Land 
Office,  and  are  also  severally  .shown  upon  the  various  official 
state  maps.  Some  of  the  meridian  lines  are  numbered  and 
others  have  local  names,  as  the  Tallahassee  principal  merid- 
ian, which  governs  the  United  States  land  surveys  in  the  state 
of  Florida ;  or  the  St.  Stephens  principal  meridian,  governing 
the  land  surveys  in  the  states  of  Alabama  and  Mississippi. 
The  state  of  Michigan  has  a  distinct  meridian,  and  its  base 
line  crosses  the  lower  peninsula  of  the  state  from  Lake  St. 
Clair  to  Lake  Michigan. 

162.  Townships.  Lines  running  east  and  west  from  the 
meridian  line  and  north  and  south  from  the  base  line  divide 
the  land  into  squares  containing  thirty-six  square  miles. 
Each  square  is  called  a  township.  A  series  of  townships 
between  any  two  lines  running  north  or  south  from  the  base 
line  is  called  a  range. 

[234] 


LAND  SURVEYING 


235 


The  illustration  below  shows  a  principal  meridian  line  and 
a  base  line. 

Form  CL. 


Base 
Line. 


3N. 

2  W. 

2N. 

2N. 

2N. 

4  W. 

3  W. 

I 

§ 

2E. 

1  N. 

IN. 

a 

1 

3  W. 

2  W. 

£ 

^ 

1  S. 

3  E. 

2  S. 

2  S. 

2  S. 

3  W. 

2W. 

2E 

3  S. 

3  E. 

The  description  of  a  township  which  is  three  north  from 
the  base  line  and  two  west  from  the  principal  meridian  line 
would  be :  Township  number  three  north  and  range  two 
west. 

Each  township,  though  said  to  be  square,  is  not  exactly  so, 
for  since  the  meridians  are  not  exactly  parallel  to.  each  other, 
because  they  all  meet  at  the  poles,  the  townships  are  longer 
on  their  southern  boundaries  than  on  their  northern  ones. 
This  is  corrected  as  far  as  practicable  by  establishing  sub- 
ordinate meridian  lines  called  correction  lines.  In  Michigan, 
a  correction  line  is  taken  at  every  tenth  township  along  the 
range,  and  in  newer  states  and  territories  they  are  much 
more  frequent. 


236      A  FIRST  BOOK  IN  BUSINESS  METHODS 


163.  Sections.  Each  township  is  divided  into  thirty-six 
squares,  and  each  square  is  called  a  section  and  contains  640 
acres,  or  nearly  that.  See  diagram  of  township  below. 

Form  CLI. 


6 

5 

4 

3 

2 

1 
12 

7 
13 

8 

17 

9 
16 

10 
15 

11 

14 
23 

13 
24 

19 

20 

21 

22 

30 

29 

28 
33 

27 
34 

26 
35 

25 

36 

31 

32 

A  Township 

The  sections  in  each  township  are  numbered.  Beginning 
with  number  one  in  the  northeast  corner  of  the  township, 
they  are  numbered  back  and  forth  to  number  thirty-six  (36) 
in  the  southeast  corner. 

This  system  furnishes  a  very  simple  method  of  describing 
a  piece  of  land  so  that  it  may  be  readily  located. 

Sections  are  subdivided  into  half  sections,  quarter  sections, 
and  sometimes  into  eighths  and  sixteenths. 

Form  CLII. 


N.  1A 
N.  W.  J4. 
S-  c.  2. 

w.^. 

N.EM 

Sec.  2. 
80  acr's 

80  acres. 

B.W.J4 

Sec.  2. 
160  acres. 

N.K.M 

S.E.g 
Sec.  2 
40  acr's 

Section  (640  acres)  with  subdivisions 


LAND  SURVEYING 


237 


The  diagram  given  below  shows  how  land  in  any  shape 
may  be  measured,  so  that  the  area  can  be  ascertained  by  the 
simple  method  of  using  triangles. 


Form  CLIII. 


25 


35 


Example :  Suppose  the  portion  of  land  shown  in  the  diagram 
has  a  crooked  creek  running  across  it,  and  it  is  desired  to  find  how 
much  land  there  is  on  the  right-hand  side  of  the  creek.  If  the 
average  width  of  the  land  is  multiplied  by  the  length  it  will,  of 
course,  give  the  area.  Now  suppose  a  measurement  is  taken  from 
the  first  bend  in  the  creek  to  the  section  line  and  is  found  to 
be  10  rods,  and  a  measurement  from  the  next  bend  in  the  creek 
to  the  section  line  is  found  to  be  20  rods ;  the  next  measurement 
15  rods ;  the  next  25  rods,  and  the  next  35  rods.  Now  the  sum 
of  all  the  measurements  taken  is  105  rods,  and  if  we  divide  this 
sum  by  the  number  of  measurements,  the  result  will  show  the 
average  width  of  the  land. 


238      A  FIRST  BOOK  IN  BUSINESS  METHODS 


In  this  case  five  measurements  were  taken. 

ist  measurement  ....  10  rods 

2d  "  ....  20     " 

3d      •       "  ....  15     " 

4th  ....  25     " 

5th  ....  35     " 

Sum  of  the  measurements,  105  rods 

Dividing  the  sum  of  the  measurements  (105)  by  5,  the  number 
of  measurements  taken,  we  have  2 1  rods  as  the  average  width  of 
the  land.  Now,  if  the  average  width  of  the  land  is  2 1  rods  and  the 
length  40  rods,  the  number  of  square  rods  in  the  piece  of  land 
would  be  40  times  21,  which  equals  840  rods,  which,  divided  by  160 
(the  number  of  square  rods  in  an  acre),  would  show  the  number 

of  acres. 

Operation:  840  divided  by  160  =  5J  acres. 

If  desired,  the  operation  may  be  performed  by  cancellation  and 
the  work  be  much  shortened. 

A.OI  v   91 

0  A  ^i-  =  5i  acres.    ' 


164.    Lands  Not  Included  in  the  United  States'  Surveys. 

The  system  of  survey  by  which  the  public  lands  of  the 
United  States  and  the  position  of  any  plot  described  could  be 
located  was  adopted  in  1786.  The  original  thirteen  states, 
together  with  Maine,  Vermont,  Kentucky,  Tennessee,  and 
certain  parts  of  Ohio,  never  were  public  lands  of  the  United 
States  and  are  not  included  in  the  surveys.  Indian  reserva- 
tions, and  lands  that  were  owned  by  individuals  or  companies 
before  the  territory  in  which  they  were  situated  became  a 
part  of  the  United  States,  are  also  omitted.  The  public  lands 
of  Texas  are  the  property  of  that  state  and  have  a  system  of 
their  own. 


LAND  SURVEYING  239 


QUESTIONS  ON  CHAPTER  XIII. 

/.  Tell  where  two  of  the  principal  meridian  lines  are 
located. 

2.  Which  one  of  the  principal  meridian  lines  is  nearest  to 
where  you  live  ? 

j.  Is  this  system  of  land  surveying  used  in  the  state  in 
which  you  live  ? 

^.     If  so,  where  is  the  base  line  located? 

5.  Are  the  townships  exactly  square  ? 

6.  What  is  the  usual  size  of  a  township  ? 

7.  How  many  sections  are  there  usually  in  a  township  ? 

8.  What  is  a  correction  line  ? 

p.     How  long  is  one  side  of  a  section  of  land  ? 

GENERAL  REVIEW  EXERCISES 

/.  Why  should  you  not  send  your  check  away  indorsed  in 
blank? 

2.  If  a  check  is  indorsed  to  you  and  the  indorsement  is 
placed  across  the  back  of  a  check  at  the  wrong  end,  where 
would  you  indorse  it  ? 

j.  If  you  hold  a  certificate  of  deposit  for  $100  on  the 
First  National  Bank,  and  wish  to  get  the  money  from  the 
bank,  how  would  you  indorse  the  certificate  ? 

4.  Would  you  make  any  different  indorsement  on  it  if  you 
wished  to  sell  it  to  H.  B.  Osgood  ? 

5.  You  receive  from  C.  T.  Davis,  for  collection,  a  note 
against  George  P.  Fletcher  for  $500;  the  note  is  made  pay- 
able  to  you  by  indorsement.    You  find  that  you  cannot  collect 
the  amount  of  the  note;  how  would  you  indorse  it  so  as  to 
transfer  it  back  to  C.  T.  Davis? 


240     A  FIRST  BOOK  IN  BUSINESS  METHODS 


6.  If  your  name  is  on  the  back  of  the  note,  would  you  be 
responsible  for  its  payment  ? 

7.  You  wish  to  send  a  quantity  of  merchandise  worth 
$245.60  to  R.  A.  Hunger,  Dallas,  Texas,  by  freight,  and  to 
collect  payment  for  the  goods  before  they  are  delivered. 
Explain  how  this  can  be  done. 

8.  You  wish  to  send  a  quantity  of  goods  by  freight  to  H. 
A.  Jennings  &  Co.,  Toronto,  Can.     What  papers  would  be 
required  ? 

p.  If  goods  are  sold  and  before  they  reach  the  buyer  it  is 
found  that  he  is  insolvent,  can  the  goods  be  stopped  ? 

10.  Can  a  railroad  company  carry  a  part  of  the  freight 
offered  and  refuse  a  part  if  they  choose  to  do  so? 


CHAPTER  XIV. 

WILLS,  SETTLING  OF  ESTA  TES 

165.  Wills.    Any  person  who  is  twenty-one  years  of  age 
or  more,  and  of  sound  mind,  may,  if  he  chooses  to  do  so,  make 
a  valid  will,  stating  what  disposition  he  wishes  to  have  made 
of  his  property  after  his  death.     The  law  varies  somewhat  in 
the  different  states  in  reference  to  wills,  but  as  a  rule  a  per- 
son may  dispose  of  his  property  in  any  way  he  wishes.     In  a 
few  of  the  states  a  married  woman  is  not  entitled  to  dispose 
of  her  property  by  will,  but  this  restriction  does  hot  gener- 
ally exist. 

166.  Kinds  of  Wills.     There  are  two  kinds  of  wills  — 
written  and  unwritten.     Unwritten  wills  are  called  nuncupa- 
tive wills.     The  latter  are  used  only  when  the  maker  meets 
with  some  accident,  or  by  persons  in  the  military  or  naval 
service  who  are  called  upon  to  make  a  will  under  circum- 
stances which  will  not  admit  of  delay.     Unwritten  or  verbal 
wills  must  have  reliable  witnesses,  and  generally  apply  to 
personal  property  only.     An  unwritten  will  is  unsafe,  and 
should  never  be  used  when  it  is  possible  to  make  a  written 
will. 

No  exact  form  of  words  is  necessary  in  making  a  will,  but 
the  maker  must  state  in  plain  language  just  what  disposition 
he  wishes  to  have  made  of  his  property  after  his  death.     A 
16  [241] 


242       A  FIRST  BOOK  IN  BUSINESS  METHODS 


will  may  be  canceled  or  modified  at  any  time  before  the 
maker's  death.  The  last  will  annuls  the  force  of  all  preced- 
ing wills,  unless  it  be  simply  an  addition  to  a  will  previously 
made.  Such  an  addition  is  called  a  codicil.  If  the  person  who 
makes  the  will  is  a  man,  he  is  called  the  testator •,  but  if  the 
maker  is  a  woman,  she  is  called  the  testatrix. 

167.  Limitation  of  Bequests.    No  husband  can  make  a 
will  which  will  deprive  his  wife  of  her  interest  in  his  real 
estate  and  appurtenances,  which  is  called  her  right  of  dower. 
If  he  devises  to  her  other  property  in  lieu  of  dower,  she  need 
not  accept  it  unless  she  chooses  to  do  so,  but  she  can  renounce 
the  provisions  of  the  will  and  take  the  share  allowed  to  her 
by  law.    The  dower  interest  which  the  wife  has  in  her  hus- 
band's estate  is  only  an  estate  for  life,  and  upon  her  death 
the  property  goes  to  the  heirs,  the  same  as  though  there  had 
been  no  widow.     In  some  states  the  right  of  dower  has  been 
abolished. 

168.  Making  of  a  Will.     It  is  preferable  to  make  a  will 
rather  than  to  leave  the  property  to  be  divided 'after  death. 
Litigation  among    the    heirs  is  thus  often  prevented.     A 
person  may  write  his  own  will  if  he  chooses  to  do  so,  but 
unless  he  is  accustomed  to  drawing  legal  papers  it  is  safer  to 
employ  some  thoroughly  capable  person  for  that  purpose. 
The  person  making  the  will  should  appoint  some  person  to 
carry  out  its  provisions,  who  is  called  an  execiitor.    No  person 
can  serve  as  an  executor  of  a  will  who  is  under  twenty-one 
years  of  age  at  the  time  of  the  proving  of  the  will ;  nor  can 
he  serve  if  he  be  a  convict,  or  drunkard,  or  a  lunatic.     No 
person  appointed  as  an  executor  is  obliged  to  serve  against 
his  will. 


WILLS,  SETTLING  OF  ESTATES 


243 


169.  Witnesses.  There  must  be  two  witnesses  to  a  will, 
and  in  some  states  three  witnesses  are  required.  They  need 
not  know  the  contents  of  the  will,  but  must  know  that  the 
instrument  which  they  sign  as  witnesses  is  a  will.  Only  such 

1  Form  CLIV. 


7, of in  the  County  of 

and  State  of being  of  sound 

mind  and  memory,  hereby  make,  ordain,  publish 
and  declare,  this  to  be  my  last  H^iU  and  STtfiittllHttlt ; 

jFirfift,  /  order  and  direct  that  my  Execut 

hereinafter  named  pay  all  my  just  debts  and 
funeral  expenses  as  soon  after  my  decease  as  con~ 
veniently  may  be. 

^CCOIttt,  After  the  payment  of  such  funeral  ex- 
penses and  debts,  I  give,  devise,  and  bequeath 

Lastly,  I  make,  constitute  and  appoint 

to  be  Execut. .  .of  this,  my  last  Will  and  Testament* 
hereby  revoking  all  former  Wills  by  me  made. 
3Tn  Witnt&8  33?  !)ereof,  /  have  hereunto  subscribed 

my  name  and  affixed  my  seal,  the day  of 

in  the  year  of  our  Lord  one  thousand  nine 

hundred j  T^TT  \ 

This  instrument  was,  on  the  day  of  the  date  thereof  signed, 

published  and  declared  by  the  said  testator 

to  be  h. .  .last  Will  and  Testament,  in  the  presence  of  us  who 
at  h... request  have  subscribed  our  names  thereto  as  wit- 
nesses, in  h..  presence,  and  in  the  presence  of  each  other. 


A  short  form  of  Will 
i 

witnesses  as  are  competent  to  testify  should  be  selected 
They  should  not  be  beneficiaries  under  the  will,  for  by  the 
common  law  a  will  so  witnessed  was  void,  and  although  the 
statutes  of  some  states  provide  that  a  will  so  witnessed  is 
valid,  the  witnesses  cannot  receive  their  legacies. 


244     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Witnesses  should  write  their  respective  places  of  residence 
after  their  names,  and  their  signatures  should  be  made  in  the 
presence  of  each  other  and  in  the  presence  of  the  testator.  If 
the  testator  has  children  and  does  not  provide  for  them  nor 
make  any  mention  of  them  in  his  will,  the  law  sometimes 
presumes  that  they  were  forgotten,  and  will  generally  give 
them  the  same  share  as  though  there  had  been  no  will. 

In  all  wills  the  testator's  name  should  be  written  in  full  at 
the  end  of  the  will,  after  which  follow  the  certificate  and  sig- 
natures of  the  witnesses. 

170.  Duties  of  an  Executor.     The  executor  of  a  will  is 
the  personal  representative  of  the  person  making  the  will, 
and  after  his  death  it  is  the  duty  of  the  executor  to  see  that 
the  will  is  carried  into  effect.    Any  one  who  is  competent  to 
make  a  will  is  legally  qualified  to  act  as  an  executor.    The 
executor  is  generally  required  to  give  a  bond  for  the  faithful 
discharge  of  his  duties  as  an  executor.    The  bond  is  usually 
about  twice  the  amount  of  the  personal  property  involved. 
If  no  executor  is  named  in  the  will,  or  if  the  one  named  does 
not  wish  to  act,  or  dies,  or  resigns,  the  court  appoints  a  per- 
son to  act  in  his  place,  and  the  person  so  appointed  is  called 
an  administrator  with  the  will  annexed. 

The  court  having  jurisdiction  of  the  estates  of  deceased 
persons  is  called  the  probate  court  in  most  of  the  states ;  in 
some  states,  however,  it  is  called  the  surrogate  court,  and  in 
others,  the  orphans  court. 

171.  Administrators.     If  a  person  dies  without  making  a 
will  and  leaves  any  property,  an  administrator  is  appointed  by 
the  judge  of  the  probate  court,  or  surrogate  court,  to  settle 
the  estate  of  the  person  deceased.    A  petition  is  presented  to 


WILLS,  SETTLING  OF  ESTATES  245 


the  judge  by  some  one  who  is  interested  in  the  settlement 
of  the  estate,  asking  him  to  appoint  an  administrator.  If  a 
woman  is  appointed  she  is  called  an  administratrix. 

The  administrator  must  give  a  bond  similar  to  that  of  an 
executor,  and  his  duties  regarding  the  settlement  of  the  estate 
are  substantially  the  same  as  those  of  an  executor,  except  in 
the  division  of  the  property  after  the  debts  are  paid.  In  the 
settlement  of  the  estate  the  administrator  should  be  guided 
by  the  law  and  by  the  instructions  given  him  at  the  probate 
office.  He  is  required  to  make  an  itemized  statement  of  all 
property  belonging  to  the  estate,  and  the  value  of  the  personal 
property  is  determined  by  persons  called  appraisers,  who  are 
appointed  by  the  court  for  that  purpose.  The  administrator 
must  account  to  the  court  for  all  property  that  comes  into  his 
possession  or  control. 

The  administrator  first  pays  the  debts  of  the  deceased. 
These  are  paid  out  of  the  personal  property,  and  if  there  is 
not  a  sufficient  amount  of  personal  property  to  pay  the  in- 
debtedness and  there  is  any  real  estate  belonging  to  the 
estate,  he  may  sell  a  part  or  the  whole  of  it  if  permission  is 
given  him  to  do  so  by  the  court.  The  debts  of  the  deceased 
must  be  paid  in  the  order  prescribed  by  law.  Although  the 
law  is  not  the  same  in  all  states,  the  debts  are  usually  paid  in 
the  following  order : 

First,  the  funeral  expenses  and  expenses  of  the  last  illness. 
Second,  the  widow's  award  or  allowance. 
Third,  the  debts  due  the  state. 
Fourth,  claims  of  other  creditors. 

If  anything  is  left  after  paying  the  debts,  the  remainder  is 
divided  among  the  legal  heirs  of  the  estate,  under  the  direc- 
tion of  the  court  and  in  the  manner  required  by  law. 


246     A  FIRST  BOOK  IN  BUSINESS  METHODS 


172.  Payment  of  Debts.     The  administrator,  executor,  or 
other  officer  appointed  by  the  court  for  that  purpose,  publishes 
a  notice  in  one  or  more  papers  in  the  county,  stating  when 
and  where  claims'  against  the  estate  may  be  presented  for 
adjustment.    The  administrator  then  settles  all  claims  against 
the  estate  as  adjusted  by  the  court,  and  its  decision  regard- 
ing the  settlement  relieves  him  of  much  responsibility  in  the 
matter.    Six  months  is  the  time  usually  allowed  for  the  settle- 
ment of  debts,  but  claims  may  be  allowed  at  any  time  before 
the  final  settlement  of  the  estate. 

All  expenses  connected  with  the  settlement  of  an  estate, 
including  the  fees  of  executors,  administrators,  appraisers, 
and  officers  of  the  court,  are  paid  from  the  funds  belonging  to 
the  estate. 

173.  Final  Settling  of  an  Estate.    When  the  debts  are 
all  paid  and  the  residue  divided  among  the  legal  heirs  as 
instructed  by  the  court,  an  account  of  all  his  proceedings  is 
made  and  filed  by  the  administrator.     Notice  by  the  court  is 
then  given  that  a  final  hearing  of  the  administrator's  account 
will  be  had,  at  which  any  one  interested  may  appear  and 
object  to  its  allowance.     But  if  the  account  is  allowed  and  no 
appeal  is  taken,  the  executor  or  administrator  is  given  his 
discharge  and  the  estate  is  closed. 

As  there  is  considerable  expense  incurred  in  settling  an 
estate,  parties  who  are  interested  sometimes  desire  to  have 
the  estate  settled  out  of  court.  This  may  be  done  if  all 
parties  interested  agree  to  it,  and  there  are  no  disputed  claims 
against  the  estate,  but  it  is  better  to  have  an  estate  settled  in 
the  regular  way  and  the  full  record  of  the  settlement  filed  in 
the  probate  court,  so  that  there  can  never  be  any  question  as 
to  its  legality. 


WILLS,  SETTLING  OF  ESTATES  247 


QUESTIONS  ON  CHAPTER  XIV. 

/.  What  is  a  will  ? 

2.  Who  is  competent  to  make  a  will  ? 

j.  When  is  an  unwritten  will  used  ? 

^.  What  is  an  unwritten  will  called  ? 

5.  Is  any  special  form  necessary  in  making  a  will? 

6.  After  a  will  has  been  made,  may  it  be  changed  ? 

7.  Can  a  man  make  a  will  so  that  his  wife  shall  have  no 
sjiare  of  his  property  ? 

8.  What  is  meant  by  the  word  "  dower  "  ? 

p.  Can  a  person  make  his  own  will,  or  is  it  necessary  to 
employ  a  lawyer  to  make  it  for  him  ? 

10.     What  is  meant  by  the  executor  of  a  will  ? 

//.     Can  any  one  act  as  an  executor  of  a  will  ? 

12.  Is  a  person  who  has  been  appointed  executor  of  a  will 
obliged  to  act  ? 

/j.  Need  there  be  any  witnesses  to  a  will  ?  What  persons 
could  not  serve  as  witnesses  to  a  will  ? 

14.  If  the  testator  of  a  will  has  children  and  makes  no 
mention  of  them  in  the  will,  what  provision  does  the  law 
make  for  them  ? 

75.  What  court  has  jurisdiction  of  the  estates  of  deceased 
persons  ? 

16.    What  other  names  are  sometimes  given  to  this  court  ? 

77.  What  is  meant  by  the  term  administrator?  By  whom 
is  he  appointed  ? 

1 8.  What  are  his  duties? 

19.  If  a  woman  is  appointed  to  settle  the  estate  of  a 
deceased  person,  what  is  she  called  ? 

20.  Is  an  administrator  required  to  give  a  bond? 


248     A  FIRST  BOOK  IN  BUSINESS  METHODS 

21.  Who  pays  the  expenses  of  settling  the  estate  of  a 
deceased  person  ? 

22.  Can  an  estate  be  settled  without  having  an  adminis- 
trator appointed  ? 

GENERAL  REVIEW  EXERCISES 

/.    What  is  meant  by  the  maturity  of  commercial  paper? 
2.     What  is  meant  by  legal  tender  ?    What  is  the  effect  of 
a  legal  tender  on  the  payment  of  an  obligation  ? 
j.     What  is  the  general  purpose  of  drafts  ? 

4.  Name  some  kinds  of  officers  who  are  required  to  give 
bonds. 

5.  What  is  the  object  in  fixing  the  amount  of  a  bond  at 
double  the  amount  of  the  debt  ? 

6.  Name  some  cases  in  which  it  is  necessary  to  have  wit- 
nesses to  a  bond. 

7.  Why  should  a  partnership  agreement  be  in  writing  ? 

8.  Why  should  the  duration  of  a  partnership  be  specified 
in  the  agreement  ? 

o.  Name  some  things  which  one  member  of  a  firm  cannot 
do  without  the  consent  of  the  other. 

10.  Why  should  a  notice  of  dissolution  of  partnership  be 
published  in  the  newspapers  ? 

//.  If  property  is  insured  against  fire,  and  loss  occurs 
from  putting  the  fire  out  instead  of  from  the  fire  itself,  can 
the  owner  collect  the  insurance  ? 

12.  If  a  house  which  has  been  insured  becomes  vacant, 
why  should  the  insurance  company  be  notified  ? 

/?.     Why  are  vacant  buildings  called  hazardous  risks? 

14.  Why  are  not  insurance  policies  usually  written  for 
the  full  value  of  the  property  ? 


WILLS,  SETTLING  OF  ESTATES  249 


75.  What  is  the  difference  between  a  quit-claim  deed  and 
a  general  warranty  deed  ? 

1 6.  How  old  must  the  grantor  be  before  he  can  make  a 
deed  which  will  be  binding  upon  him  ? 

77.  May  a  boy  who  is  twelve  years  of  age  buy  a  piece  of 
property  and  get  a  deed  for  it  which  would  be  binding  ? 

1 8.  Suppose  a  man  who  cannot  write,  sells  a  piece  of  land ; 
how  can  the  deed  be  signed  ? 

10.    What  is  the  object  in  having  witnesses  to  a  deed? 

20.  What  is  the  seal  to  a  deed  ? 

21.  What  is  important  about  the  delivery  of  a  deed  ? 

22.  What  is  meant  by  the  recording  of  a  deed  ? 

23.  Why  should  a  person  who  loans  money  and  receives 
as  security  a  mortgage  on  a  building,  have  the  insurance  on 
the  building  made  payable  to  him  ? 

24..  When  the  full  amount  due  on  a  mortgage  has  been 
paid,  how  is  the  mortgage  discharged  ? 

25.  If  a  man  cannot  pay  the  mortgage  which  he  owes 
when  it  becomes  due,  does  he  lose  his  title  to  the  property  ? 

26.  What  is  the  difference  between  a  chattel  mortgage 
and  a  real-estate  mortgage  ? 

2j.  In  United  States  land  surveying,  what  is  meant  by  a 
meridian  line  ? 

28.  What  are  base  lines  ? 

29.  What  is  a  range  ? 

jo.    How  many  principal  meridian  lines  are  there  ? 
j7.     How  large  is  a  township  ? 
32.    What  is  meant  by  range  three  west  ? 
jj.     How  large  is  a  section  of  land  ? 
34.     How  many  sections  in  a  township  ? 
.     How  are  sections  numbered  ? 


SSGNS,  ABBREVIATIONS,  AND   CONTRACTIONS 
USED  IN  BUSINESS 


ij    Check  mark  ;   also  radical  sign. 
"     (It.  Ditto)     The  same  as  above. 

Degrees. 

Primes.     Minutes.     Feet. 

Seconds.   Inches.   Thus  :  7°  10'  4"  in  circular  measure,  or  7'  10"  4'" 
in  duodecimal  long  measure.     Also  used  for  ditto  marks. 

11  One  and  one-fourth. 

12  One  and  one-half. 

13  One  and  three-fourths. 

+  (L.  Plus,  more)  Addition. 

—  (L.  Minus,  less)  Subtraction. 

X  (By  or  into)  Multiplication.  Also,  area,  as  7X9,  read  7  by  9, 
means  7  wide  and  9  long. 

-4-  (Divided  by)  Division.  The  :  alone  is  also  a  sign  of  division 
as  used  in  ratio,  thus  4.:  7  ;  and  the  —  alone  is  a  sign  of  divi- 
sion as  used  in  writing  fractions,  thus  A. 

=  (Equality)  Equals.  The  double  colon,  ::  ,  as  used  in  propor- 
tion, is  also  a  sign  of  equality,  thus  4:71:12:21. 

%  Per  Cent.  The  upper  o  represents  a  numerator  and  the  lower 
the  denominator  100;  thus:  7$  was  formerly  written  T-J-g-. 

f>   Per.     (L.  By  or  through) 

$  Dollars  ;  said  to  be  a  contraction  of  U  upon  S  for  United  States 
money. 

tf     Means   "  Number "   if  written   before   a   figure,  as   #40  ;    but 
"  pounds  "  if  written  after,  as  40$. 
[250] 


SIGNS,  ABBREVIATIONS,  CONTRACTIONS     251 


@  (L.  ad.)     To  or  at. 

A  i.     First  Class. 

A.orAns.    Answer. 

Acc.t  Acct.,  or  a/c.    Account. 

Adv.     (L.  According  to  value) 

Ad  valorem. 
Admr.    Administrator. 
Admx.     Administratrix. 
Adv.    Advertisement. 
Agt.     Agent. 
Amt.     Amount. 
a/s.    At  sight  or  Account  sales. 
Ass'd.    Assorted. 
Asst.    Assistant. 
Bal.     Balance. 
B.  B.     Bill  Book. 
Bbl.     Barrel;  Barrels. 
Bdls.     Bundles. 
B/E.    Bill  of  Exchange. 
Bgs.    Bags. 
Bk.    Bank ;  Book. 
Bkts.     Baskets. 
B/L.    Bill  of  Lading. 
Elk.     Black. 
Bis.     Bales. 
Bot.     Bought. 
B.  P.     Bills  Payable. 

B.  Rec.     Bills  Receivable. 
Bro't.    Brought. 

Bu.    Bushel. 

Bx.     Box  or  Boxes. 

Cash.    Cashier. 

C.  B.    Cash  Book. 
Chgs.    Charges. 


Chts.     Chests. 

C.  H.  Court  House ;  Custom 
House. 

C.  I.  F.  Costs,  Insurance, 
Freight. 

Cks.     Casks  or  Checks. 

Clk.    Clerk. 

Co.     Company ;  County. 

C.  O.  D.  Cash  (or  Collect)  on 
Delivery. 

Col.    Collection. 

Com.    Commission. 

Const.    Consignment. 

Cor.  Sec.  Corresponding  Secre- 
tary. 

Cr.     Credit;  Creditor. 

C.  S.  B.      Commission    Sales 
Book. 

Ct.  or  $.    Cent.     (L.  Centum,  a 

hundred.) 
Cts.    Cents. 
Cw t.    A  hundred  weight. 

D.  B.     Day  Book. 
d/d.     Days  after  date. 

Dept.     Department ;  Deponent. 
Dft.    Draft;  Defendant. 
Disct.     Discount. 
Div.     Dividend ;  Division  ;   IX- 

vide ;  Divisor. 
Do.    (It.  Ditto)    The  same. 
Doz.     Dozen. 
Dr.    Debtor;  Doctor. 
Dray.     Drayage. 
d/  s  or  d.  s.    Days  after  sight. 


252      A  FIRST  BOOK  IN  BUSINESS  METHODS 


ea.     Each. 

E.  E.     Errors    excepted ;    Ells 

English. 
e.g.     (L.  Exempli  gratia)  For 

example. 
End.     Enclosed. 

E.  &  O.  E.     Errors  and  omis- 
sions excepted. 

et  al.     (L.  et  alii)  And  others. 
Exch.     Exchequer  ;   Exchange. 
Exec,  or  Exr.     Executor. 
Execx.  or  Ex'x.     Executrix. 
Exp.     Export ;   Exporter  ;   Ex- 
pense. 

Fahr.     Fahrenheit. 
Fav.     Favor. 
Fir.     Firkin. 
Fo.  or  Fol.    Folio. 

F.  O.  B.    Free  on  Board. 
Fo'd.    Forward. 

fr.     From. 
Fr't.     Freight. 
Gal.    Gallon ;  Gallons. 
Gr.     Grain ;  Grains. 
Guar.     Guarantee. 
Hdkf.     Handkerchief. 
Hf.  chts.     Half  chests. 
Hkd.     Hogshead. 
Hon.     Honorable. 
Hund.     Hundred. 
/.  B.     Invoice  Book. 
i.e.  (L.  idest)  That  is. 
Incor.    Incorporated. 
Ins.     Insurance. 


inst.     Instant  —  in  the  present 

month. 

Int.     Interest. 
In  trans.     (L.  In  transitii)     In 

the  passage. 
Inv.     Invoice. 
Inv't.     Inventory. 
Jr.    Junior. 
Kg.    Keg. 
L.  or  Ib.    (L.  Libra)  A  pound  in 

weight. 

L/C.     Letter  of  credit. 
Led.     Ledger. 
L.  F.     Ledger  Folio. 
L.  S.     Left  Side  ;  (L.  Locus  Sig- 

illi)  Place  of  the  Seal. 
M.    One  thousand. 
Manuf.    Manufacture ;    Manu- 
facturer. 

Mdse.     Merchandise. 
Mem.     Memorandum. 
Messrs,  or  MM.     (F.  Messieurs) 

Gentlemen,  Sirs. 
Mf'd.     Manufactured. 
Mfst.     Manifest. 
Mme.     Madame.    Mmes.     Mes- 

dames. 
Mo.     Month. 
Mol.     Molasses. 
Mr.     Master  or  Mister. 
Mrs.     Mistress. 
Mtg.     Mortgage. 
N.  A.     North  America. 
Nav.    Navigation. 


SIGNS,  ABBREVIATIONS,  CONTRACTIONS     253 


N.  B.  (L.  Nota  Bene)  Note 
Well  or  Take  Notice. 

No.  or  ft.     Number. 

N.  P.     Notary  Public. 

O.  B.     Order  Book. 

O.  K.    All  Correct. 

oz.     Ounce  or  ounces. 

/.     Page  ;  pint ;  pole ;  part. 

Payt.     Payment. 

pcs.    Pieces. 

Pd.    Paid. 

Per.  an.  or/,  a.  (L.  per  annum) 
By  the  year. 

f0,  per  cent.,  per  ct.  (L.  per  cen- 
tum) By  the  hundred. 

Pk.     Peck. 

Pkg.     Package. 

P.  &  L.     Profit  and  Loss. 

P.  O.  D.     Pay  on  Delivery. 

P.  O.  O.     Post-office  Order. 

pp.     Pages. 

Pr.  or  per.     By. 

Prem.     Premium. 

Prop'r.     Proprietor. 

Prox.  (L.  Proximo  mense)  Next 
month. 

P.  S.     Postscript. 

Pub.     Publisher;  Public. 

Pwt.     Pennyweight. 

Qr.   Quarter  (28  pounds) ;  Quire. 

Qf.     Quart;  Quantity. 

Reed.     Received. 

Retd.     Returned. 

R.  R.    Railroad. 


Ry.     Railway. 

5.  B.     Sales  Book. 

Schr.     Schoonef. 

Shipt.     Shipment. 

S.  O.     Seller's  Option. 

Sig.     Signature. 

S.  5.     Steamship. 

St.     Saint;  Street;  Sight. 

St.  Dft.     Sight  Draft. 

Stor.    Storage. 

Sir.     Steamer. 

Sunds.    Sundries. 

Supt.    Superintendent. 

T.  B.     Time  Book. 

Treas.    Treasurer. 

Ult.  or  ulto.  (L.  Ultimo  mense) 
Last,  or  of  the  last  month. 

U.S.A.  United  States  of  Amer- 
ica ;  United  States  Army. 

U.  S.  M.     United  States  Mail. 

U.  S.  N.     United  States  Navy. 

Ves.     Vessel. 

via.     (L.)  By  way  of. 

Vice.  Pres.    Vice-President. 

viz.  (Contraction  from  L.  vide- 
licet) Namely ;  to  wit. 

Vol.    Volume. 

vs.     (L.  versus)  Against. 

W.  B.    Waybill. 

Wt.    Weight. 

X.     Extra. 

XX.     Doubly  Extra. 

Y.  or  Yr.     Year. 

Yd.    Yard. 


COMMERCIAL    WORDS  AND  PHRASES 


Account  Current.  A  running  account.  A  detailed  statement  of 
the  transactions  between  two  persons  or  firms. 

Account  Sales.  A  detailed  statement  of  the  sales  of  goods  by  a 
commission  merchant,  showing  also  the  expenses,  after 
charges,  and  net  proceeds. 

Administrator.  A  man  appointed  by  the  court  to  settle  the  estate 
of  a  person  deceased. 

Administratrix.  A  woman  appointed  by  the  court  to  settle  the 
estate  of  a  person  deceased. 

Ad  valorem.  (L.)  According  to  value.  A  custom-house  term, 
relating  to  the  estimating  of  duties  upon  the  value  of  im- 
ported goods. 

Affidavit.    A  written  declaration  under  oath. 

Annuity.  A  sum  to  be  paid  yearly,  to  continue  for  a  given  num- 
ber of  years  or  for  life ;  an  annual  allowance. 

Annul.    To  make  void  ;  to  cancel. 

Ante-date.    To  date  before  the  actual  time  of  writing. 

Appraisal.     The  act  of  placing  a  value  on  goods. 

Appraiser.    A  person  appointed  to  value  real  or  personal  property. 

Arbitration.  The  adjustment  of  a  disputed  point  by  a  person  or 
persons  chosen  by  the  parties  in  dispute. 

Assets.  The  funds,  property,  and  total  resources  of  a  person  in 
business. 

Assignee.  A  person  to  whom  the  property  of  a  bankrupt  or  an 
insolvent  debtor  is  transferred  for  adjustment,  for  the  bene- 
fit of  the  insolvent's  creditors. 

[254! 


COMMERCIAL  WORDS  AND  PHRASES        255 


Assignment.    The  act  of  transferring  property  to  the  assignee. 

Attachment.  A  warrant  for  the  purpose  of  seizing  a  man's  prop- 
erty. 

Balance  Sheet.  A  statement  in  condensed  form  showing  the  con- 
dition and  progress  of  the  business. 

Bankable.    Receivable  at  a  bank  at  par  value. 

Bank  Balance.    Net  amount  on  deposit  at  bank. 

Bear.  Among  stock  brokers,  one  who  having  " sold  short" —  that 
is,  sold  what  he  has  not  yet  bought  —  desires  the  price  of 
the  stock  to  fall  so  that  he  may  buy  at  a  lower  rate  than  he 
has  sold  at,  and  thus  make  a  profit.  He  will  do  all  he  can 
to  "bear  down  "  the  price. 

Bill  of  Lading.  A  written  account  of  goods  shipped  and  the  con- 
dition of  shipment,  having  the  signature  of  the  carrier's 
Agent,  and  given  to  the  shipper  as  a  receipt. 

Bill  of  Sale.  A  writing  given  by  the  seller  to  the  buyer,  trans- 
ferring the  ownership  of  personal  property. 

Board  of  Trade.  An  association  of  business  men  for  the  regula- 
tion and  advancement  of  commercial  interests. 

Bona  Fide.     (L.)     In  good  faith. 

Bond.  An  instrument  under  seal  by  which  a  person  binds  him- 
self, his  heirs  and  assigns  to  certain  stipulations. 

Bonded  Goods.  Goods  which  are  stored  in  a  bonded  warehouse 
(see  below)  or  in  bonded  cars,  the  owner  having  given 
bonds  securing  the  payment  of  import  duties  or  of  internal 
revenues  upon  their  removal  or  their  arrival  at  some  inland 
city  of  entry,  and  before  a  specified  time. 

Bonded  Warehouse.  A  building  or  warehouse  in  which  goods 
subject  to  revenue  duties  are  stored  until  the  importei 
either  pays  the  duties  or  re-exports  the  goods,  or,  where 
goods  subject  to  an  internal  revenue  tax  are  held,  until  the 
tax  is  paid. 

Bondsman.  One  who  gives  security  for  the  faithful  performance 
of  a  contract. 


256      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Bonus.    A  premium  for  a  loan  or  for  other  privileges. 

Broker.    An  agent  or  middle-man  between  the  buyer  and  seller. 

Bull.  One  who  operates  to  increase  the  values  of  stocks  in  the 
market  that  he  may  sell  his  own  at  a  better  advantage.  He 
labors  to  "toss  up  "  the  price. 

Bullion.     Uncoined  gold  or  silver. 

Charter.  A  paper  from  government  defining  the  rights  and  privi- 
leges of  corporations  ;  to  hire  or  let  an  instrument  of  trans- 
portation, as  a  ship,  a  railway  car. 

Charter  Party.     A  written  contract  for  hiring  or  chartering  a  ship. 

Chattel.  Any  kind  of  property  except  real  estate,  as  merchandise, 
notes  and  accounts,  animals,  leases  of  real  estate,  etc. 

Check.    An  order  on  a  bank  drawn  by^a  depositor. 

Clearing  House.  A  kind  of  banking  exchange  established  in  some 
of  the  large  cities  for  the  convenience  of  daily  settlements. 
The  drafts  and  checks  of  the  various  banks  on  each  other  are 
mutually  exchanged  without  individual  presentation  at  the 
banks,  and  a  balance  struck;  the  balance  only  is  paid  in  cash. 

Collateral.  Pledges  ui:  stocks,  notes,  or  chattels  for  security  of 
loans  and  other  indebtedness. 

Commerce.  The  business  of  exchanging  commodities  between 
different  places ;  mercantile  business  in  general,  as  carried 
on  between  individuals  or  companies  of  different  countries, 
or  of  the  same  country  ;  and,  in  a  restricted  sense,  the  ship- 
ping which  belongs  to  a  country. 

Commission  Agent.    One  who  does  business  on  commission. 

Common  Law.  The  unwritten  law  which  receives  its  binding 
force  from  immemorial  usage,  in  distinction  from  the  writ- 
ten or  statute  law. 

Consignee.  The  agent  or  person  to  whom  goods  are  sent  to  be 
sold  on  commission.  The  goods  are  said  to  be  consigned, 
and  are  called  by  the  one  who  receives  them  a  consignment 
The  person  to  whom  merchandise  is  addressed  by  a  bill  of 
lading  or  otherwise. 


COMMERCIAL  WORDS  AND  PHRASES         257 


Consignor.  The  party  who  consigns  his  goods  to  an  agent.  A 
shipper  of  merchandise. 

Contra.     (L.)     On  the  opposite  side. 

Copartnership.  The.  joining  of  two  or  more  persons  into  one  firm 
for  the  purpose  of  carrying  on  any  enterprise.  It  has  the 
same  meaning  as  partnership. 

Coupon.  An  interest  note  or  a  certificate  attached  to  a  bond  or 
principal  note  which  is  cut  off  and  collected  when  the  note 
or  certificate  is  due. 

Credentials.    Testimonials  giving  authority. 

Demurrage.  Money  forfeited  for  detaining  a  vessel  beyond  the 
time  specified  in  her  charter  party. 

Dishonor.  A  failure  to  pay  an  obligation  when  due.  A  failure  to 
accept  a  draft  when  presented  for  acceptance. 

Dockage.    Charge  for  the  use  of  a  dock. 

Dower.  The  right  of  a  widow  to  a  one-third  interest  in  all  the  real 
estate  owned  by  her  husband  at  any  time  after  their  mar- 
riage. 

Draft.  A  written  order  or  request  for  the  payment  of  money  at  a 
certain  time. 

Drawee.    One  on  whom  the  draft  is  drawn.     The  payer. 

Drawer.  The  person  who  draws  the  draft,  and  thus  asks  the 
drawee  to  pay  to  the  payee  named. 

Duress.  Personal  restraint  from  fear  of  personal  injury  or  im- 
prisonment. 

Earnest.  Part  of  purchase  money  paid  or  part  of  goods  delivered 
to  bind  a  verbal  contract. 

Effects.  Goods  or  property  of  any  kind,  including  debts  due. 
Resources. 

Embargo.  An  order  of  the  government  prohibiting  ships  from 
departing  or  landing. 

Equity.  The  principles  of  right  and  justice,  especially  as  applied 
to  the  correction  of  statute  law  in  extreme  cases. 

Equity  of  Redemption.  The  right  allowed  a  mortgagor  of  a  rea- 
sonable time  to  redeem  lands  mortgaged. 

B 


258     A  FIRST  BOOK  IN  BUSINESS  METHODS 


Execution.  A  writ  which  authorizes  an  officer  to  carry  into  effect 
the  judgment  of  the  court. 

Fee  Simple.  A  title  to  real  estate  held  by  a  person  in  his  own 
right  and  without  conditions. 

Forced  Sale.     Sale  made  under  compulsion. 

Forwarder.  An  agent  who  attends  to  the  conveyance  of  goods, 
especially  re-shipping. 

Gross  Weight.  Weight  of  merchandise,  including  the  case  or 
wrapping. 

Guarantee  or  Guaranty.  A  surety  for  the  performance  of  a  con- 
tract in  case  the  party  making  the  contract  fails  to  keep  it. 
A  security  against  loss. 

Honor.     To  accept  a  draft  or  to  pay  it  when  due. 

Impost.     Duty  on  goods  paid  by  the  importer. 

Indemnify.     To  recompense  for  injury  or  loss. 

Indemnity.     A  guarantee  against  loss.     Insurance. 

Indenture.     A  writing  containing  a  contract. 

Indorse.  To  write  one's  name  on  the  back  of  a  note,  draft,  or 
other  document. 

Injunction.  A  legal  writ  by  which  a  party  is  restrained  from  doing 
a  certain  act. 

Inland  Bill.    A  draft  between  parties  in  the  same  country. 

Insolvency.     Inability  to  pay  debts.     Bankruptcy 

Intestate.     Dying  without  having  made  a  will. 

In  transitu.     (L.)     In  a  state  of  going  from  one  place  to  another. 

Inventory.  An  itemized  schedule  or  list  of  goods  and  other  prop- 
erty, with  their  value  as  then  estimated. 

Invoice  Book.     A  book  in  which  invoices  are  copied  or  placed. 

Jettison  (also  Jetson).  The  goods  voluntarily  thrown  overboard 
to  lighten  a  ship  in  cases  of  extreme  peril. 

Jobber.  One  who  buys  goods  from  the  manufacturers  and  import- 
ers and  sells  them  to  retailers. 

fob  Lot.  An  irregular  assortment.  Miscellaneous  goods  unsold 
at  the  end  of  the  season. 


COMMERCIAL  WORDS  AND  PHRASES        259 


Judgment.     The  decision  of  a  court. 

Lease.  A  contract  granting  possession  and  use  of  property  for  a 
specified  time. 

Legacy.    A  bequest ;  a  gift  of  property  by  will. 

Lessee.    One  to  whom  a  lease  is  made. 

Letter  of  Credit.  An  open  letter  authorizing  the  bearer  to  receive 
money  on  the  credit  of  the  writer.  (Generally  issued  by 
banking  houses  to  travelers  in  foreign  countries.) 

License.    A  legal  permit  to  carry  on  a  certain  business. 

Lien.  (Fr.  bond)  A  legal  claim  on  property,  and  power  to  pre- 
vent sale  of  the  property  without  satisfying  the  claim. 

Lighter.  A  flat-bottomed  boat  used  in  loading  and  unloading 
vessels  that  cannot  sail  up  to  the  wharf. 

Lighterage.    Charges  for  the  use  of  a  lighter. 

Manifest.     A  list  of  articles  comprising  a  ship's  cargo. 

Margin.    Variance  between  an  article's  buying  and  selling  price. 

Marine.     Pertaining  to  the  sea. 

Maturity.    The  date  when  commercial  paper  becomes  due. 

Mercantile  Agency.  A  company  whose  business  it  is  to  obtain 
and  circulate  among  its  patrons  information  as  to  the  busi- 
ness standing  of  merchants  and  traders. 

Mercantile  Law.     Law  pertaining  to  business  transactions. 

Mortgagee.     The  person  in  whose  favor  a  mortgage  is  given. 

Mortgagor.    The  person  who  gives  a  mortgage. 

Negotiable.  That  which  is  transferable  by  delivery,  assignment, 
or  indorsement. 

Net.    Clear  of  all  charges  and  deductions. 

Net  Proceeds.    The  remainder  after  deducting  charges  from  sales. 

Net  Weight.    Weight  after  deducting  all  allowances. 

Nominal.     Existing  in  name  only. 

Notary  or  Notary  Public.  An  officer  authorized  by  law  to  admin- 
ister oaths,  take  acknowledgments  of  deeds  and  other 
papers,  and  to  protest  notes  and  drafts  for  non-acceptance 
or  non-payment. 


26o      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Open  Account.    An  unsettled  account  with  a  firm  or  individual. 

Outlawed.  A  term  applied  to  a  debt  which  has  run  beyond  the 
time  when  the  law  will  enforce  payment. 

Par  Value.  The  nominal  value ;  usually  the  printed  or  written 
value  of  any  commercial  paper. 

Parol.     Not  written  ;  especially  not  written  and  sealed. 

Pawn-Broker  (also  written  pawnbroker}.  One  who  lends  money 
on  goods,  possessing  the  goods  and  the  power  to  dispose  of 
them  if  the  money  is  not  returned  according  to  contract. 

Payee.    A  person  to  whom  money  is  to  be  paid. 

Payer.    A  person  who  pays  or  promises  to  pay. 

Plant.  The  entire  outfit  necessary  to  carry  on  a  trade  or  mechan- 
ical business.  It  includes  the  real  estate  as  well  as  the  tools 
and  machinery. 

Post-date.     (After  date.)    To  date  after  the  real  time  of  writing. 

Power  of  Attorney.  A  written  instrument  giving  an  agent  author- 
ity to  act  for  his  principal  in  matters  requiring  such  written 
delegation  of  power. 

Price  Current.    A  list  of  merchandise  with  market  values  annexed. 

Primage.  A  percentage  allowed  to  the  master  of  a  vessel  on  the 
amount  of  freight  earned. 

Prima  Facie.    On  the  first  view. 

Pro  Rat  a.     (L.  In  proportion}    A  proportional  distribution. 

Protecting  a  Draft.  Accepting  or  paying  a  draft  to  prevent  its 
being  dishonored  or  protested. 

Protest.  A  formal  declaration  made  by  a  notary  public,  that  a 
note  was  not  paid  at  maturity,  or  that  a  bill  of  exchange  was 
not  accepted  when  presented,  or  was  not  paid  when  due. 
(2)  An  official  statement  by  the  master  of  a  vessel  that 
damage  to  ship  or  cargo  was  caused  by  stress  of  weather 
and  not  by  negligence. 

Receiver.  A  person  appointed  to  take  charge  of  a  corporation  on 
its  dissolution,  and  to  distribute  its  property  according  to 
law. 


COMMERCIAL  WORDS  AND  PHRASES        261 


Rescind.     To  revoke  ;  to  annul ;  to  countermand. 

Resources.     Money,  property,  or  that  which  can  be  converted  into 

property,  as  claims  against  other  people  either  on  written  or 

verbal  promises. 
Revocation.    The  recall  of  authority  conferred  on  another,  as  the 

revocation  of  agency. 
Salvage.     The  allowance  made  by  law  to  persons  who  voluntarily 

assist  in  saving  a  ship  or  her  cargo  from  peril. 
Shipping  Clerk.     A  person  who  attends  to  the  shipping  of  goods. 
Silent  Partner.     One  who  shares  in  the  profits  of  a  business,  but 

whose  name  does  not  appear  in  the  firm  name,  and  who 

takes  no  active  part  in  the  business. 
Sinking  Fund.    A  sum  of  money  set  apart  for  the  redemption  of 

debts. 
Stock.     Capital  invested  in  trade.     Goods  on  hand. 

Capital  Stock.     The  capital  of  a  corporation  as  represented  by 

the  shares. 
Common  Stock.    That  stock  which  entitles  the  owner  to  an  equal 

proportionate  dividend  of  the  corporate  profits  and  assets 

with  one  shareholder  or  class  of  shareholders,  having  no 

advantage,  priority,  or  preference  over  another. 
Preferred  Stock.    That  stock  which  entitles  the  owner  to  divi- 
dends out  of  the  net  profits  before  or  in  preference  to  the 

holder  of  the  common  stock. 
Watered  Stock.    Stock  which  purports  to  represent,  but  does  not 

represent  in  good  faith,  money  paid  into  the  treasury  of  the 

corporation  or  money's  worth  actually  contributed. 
Stock  Exchange.    A  place  where  brokers  and  bankers  meet  to  buy 

and  sell  stocks,  bonds,  etc.  - 
Stockholder.    One  who  owns  shares  in  a  joint  stock  company  or 

corporation. 
Stoppage  in  transitu.     The  right  which  the  seller  has  to  stop  the 

goods  he  has  shipped  any  time  before  they  reach  the  buyer, 

if  he  discovers  that  the  buyer  is  insolvent. 


262      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Syndicate.     A  number  of  capitalists  who  unite  to  conduct  some 

great  commercial  enterprise. 
Tare.     (Fr.)     An  allowance  for  the  weight  of  boxes,  barrels,  etc., 

in  which  goods  are  shipped. 

Tenant.     One  who  holds  or  occupies  property  under  a  lease. 
Tender.     An  offer ;  a  proposal  for  acceptance. 
Tickler.     A  book  containing  a  memorandum  of  notes  and  debts 

arranged  in  the  order  of  their  maturity. 
Time  Draft.    A  draft  maturing  at  a  future  specified  time. 
Trade  Discount.    A  discount  or  series  of  discounts  from  list  prices 

made  to  dealers,  or  because  of  a  change  in  prices. 
Trustee.     One  to  whom  any  business  or  property  is  committed  as 

a  trust. 
Underwriter.     One  who  insures ;  so  called  from  writing  his  name 

under  the  conditions  of  the  policy. 

Usury.     The  taking  of  more  than  the  legal  rate  of  interest. 
Voucher.     Such  papers  or  documents  as  prove  the  truth  of  ac- 
counts—  thus,  a  receipt  is  a  voucher  for  the  payment  of 

money. 

Waybill.    A  document  containing  a  list  of  goods  sent  by  railroad. 
Wharfage.     Money  paid  for  the  use  of  a  wharf. 
Wharfinger.     The  owner  or  keeper  of  a  wharf. 
Wholesale.     (To  sell  whole.)     To  sell  goods  in  large  quantities, 

usually  in  unbroken  packages. 
Writ.     An  order  issued  from  a  court  of  law  to  one  of  its  officers, 

as  in  the  case  of  a  writ  of  attachment ;  or  to  one  or  more 

litigants,  as  in  the  case  of  an  injunction  writ. 


THE  INDEX 


A  BBREVIATIONS,  in  letters,  13,  15,  16  ; 
used  in  business,  list  of,  250-253. 
Abstracts  of  Title,  213-216. 

Accommodation  Notes,  89-90. 

Account,  statements  of,  see  Statements. 

Acknowledgment  of  Signature,  219. 

Adams  Express  Company  Collection  En- 
velope, 153. 

Address,  in  the  heading  of  a  letter,  13 ;  in- 
side the  letter,  12,  14 ;  upon  the  envelope, 
18-20 ;  forms  for  envelope,  19 ;  for  envel- 
ope of  letter  of  introduction,  20. 

Administrator,  244-245. 

Administratrix,  245. 

Agencies,  see  Commercial. 

Appraisers,  245. 

Articles  of  Agreement,  165. 

Assignment  of  Mortgage,  229;  form,  230. 

Attorney,  power  of,  134;  revocation  of,  135. 

BANK  Book,  58. 
Bank  Discount,  83. 
Bank  Drafts,  110-112. 
Banking,  53-76. 
Banks,  uses  of,  53  ,  savings,  54  ;  commercial 

deposit,  55-56;  correspondent,  112. 
Base  Lines,  in  surveying,  234. 
Bears  and  Bulls,  188. 

Bills,  34-35 ;  forms  for,  34,  35  ;  assignment 
of,  35 ;  form  showing  discount,  44.  See 
also  Invoices. 

Bills  of  Exchange,  see  Exchange. 
Bills  of  Lading,  147-149;   with  draft  at- 
tached, 155-158. 


Bills  of  Sale,  172-173;  forms,  173. 

Boards  of  Trade,  186-187;  sales  and  values. 
187-188;  brokers— bulls  and  bears,  188-189; 
range  of  prices,  188;  inspection  and  grad- 
ing, 189. 

Bondholders,  191. 

Bond  of  Indemnity,  91. 

Bonds,  173-178;  forms,  174,  175,  177;  for  fidel- 
ity of  clerk,  174-175;  for  faithful  service, 
177-178;  sureties,  176;  surety  companies, 
178;  and  stocks  191;  government,  192; 
prices  of,  194. 

Bonds,  stocks  and,  191-192. 

Bradstreet's  Commercial  Agency,  135. 

Brokers,  188. 

Brush-marking,  directions  for,  141-142; 
form,  142. 

Bucket  Shops,  190. 

Bulls  and  Bears,  188-189. 

Business  Letters,  11-12;  form  for,  12;  suit- 
able paper  for,  12;  parts  of,  13;  body  of, 
16;  directions  for,  16;  models  for,  18,  28-29; 
folding,  18. 

CABLE  Messages,  30. 
Capital  Stock,  190. 
Carriers,  common,  185. 
Cash  Discount,  42-44. 
Cash  Grain,  187. 

Certificate  of  Deposit,  70-71;  form,  70. 
Certificates  of  Stock,  190. 
Chamber  of  Commerce,  186. 
Change,  how  to  make,  140. 
Chattel  Mortgage,  226;  note,  226. 


264      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Check  Book,  58. 

Checks,  forms,  58,  59,  60,  61,  62,  63,  64,  67,  68, 
69  •,  directions  for  writing,  59-64,  71-72 ; 
indorsement  of,  64-65  ;  payable  to  bearer 
or  order,  65-66 ;  post-dated,  66  ;  exchange 
on,  67-68;  certified,  68-70;  travelers',  127- 
128;  voucher,  70. 

Codes,  telegraphic,  32. 

Codicil  of  a  Will,  242. 

Coin  or  Bullion  by  Express,  193. 

Collateral  Notes,  98-99. 

Collection,  indorsement  for,  109. 

Collection  by  Express  Companies,  153-155- 

Collection  Envelopes,  forms,  153,  154. 

Commerce,  Chamber  of,  186. 

Commercial  Agencies,  135-139;  reference 
books,  137-139 ;  forms  of  reference  books, 

137. 138, 139- 
Commercial  Words  and  Phrases,  list  of, 

254-262. 

Common  Carriers,  185. 
Common  Stock,  191. 
Complimentary  Clcse  of  a  Letter,  position 

of,  12, 17 ;  forms  of,  17. 
Compound  Interest,  see  Interest. 
Consignee,  149. 
Consignor,  147. 
Contractions  used  in  Business,  list  of,  250- 

253- 
Contracts,    162-165;    valid    consideration 

necessary,  163 ;  written,  163-164 ;  verbal, 

164 ;   articles   of   agreement,   165 ;   form, 

165. 

Copartnership,  articles  of,  198-199. 
Correction  Lines,  in  surveying,  235. 
Correspondent  Banks,  112. 
Courts,  equity,  200  ;  probate,  244  ;  surrogate, 

244 ;  orphans',  244. 

Credit,  letters  of,  124-127  ;  forms,  125,  126. 
Credit  Memorandum,  46-47  ;  form,  46. 
Credits,  on  statements  of  account,  39,  40,  41, 

42>  43- 


DATE  of  Maturity,  of  note,  84-85. 
Dates  of  Reckoning  Interest,  54-55. 
Days  of  Grace,  82. 
Debits,  on  statements  of  account,  39,  40,  41, 

42>  43- 


Deeds,  213-222 ;  warranty,  214-215 ;  parties 
to,  216-217 ;  general  warranty,  217 ;  quit- 
claim, 217  ;  form,  218  ;  special  warranty, 
219  ;  signing,  sealing,  and  delivery,  219- 
220;  in  escrow,  220;  recording  of,  220-221; 
trust,  221-222 ;  registrar  of,  221. 

Defeasance,  226. 

Delivery  of  Deed,  importance  of,  220. 

Deposit,  certificate  of,  70-71 ;  form,  70. 

Deposit  Book,  55. 

Deposits,  in  savings  banks,  54,  55 ;  records 
of,  56-57;  in  metropolitan  banks,  no. 

Deposit  Slip  or  Ticket,  56-57 ;  form,  57. 

Directions,  for  letter  writing,  16 ;  for  use  of 
titles,  22-23;  for  writing  checks,  59-64, 
71-72  ;  for  pen  lettering,  141-142. 

Discount,  trade,  38-42 ;  cash,  42-44  ;  bank,  83. 

Dishonoring  a  Draft,  109-110. 

Dissolution  of  Partnership,  200-201 ;  notice 

Of,  201. 

Dividends,  191. 

Dower,  right  of,  217,  242. 

Drafts,  106-115  ;  uses  of,  106-108  ;  forms,  107, 
108,  in,  112,  128,  156,  157 ;  indorsement  of 
"for  collection,"  109 ;  dishonoring,  109-110 ; 
protest  of,  no;  bank,  110-112;  uses  of 
bank,  112 ;  foreign,  128 ;  attached  to  bill 
of  lading,  155-158. 

Drawee,  of  a  draft,  106. 

Drawer,  of  a  check,  59  ;  of  a  draft,  106. 

Due  Bills,  form,  51. 

Dun  &  Company's  Commercial  Agency,  135. 


EQUITY,  court  of,  200. 
Equity  of  Redemption,  229-231. 
Escrow,  deed  in,  220. 

Estates,  settling  of,  244-246. 

Exchange,  on  checks,  67-68  ;  payable  at  par, 
67 ;  foreign  bill  of,  127,  129 ;  inland  bill 
of,  129. 

Exchanges,  stock,  186,  19*;  produce,  186. 

Executor,  242 ;  duties  of,  244. 

Expense  or  Freight  Bills,  railroad,  149-150. 

Express,  coin  or  bullion  sent  by,  123. 

Express  Business,  152-155 ;  collections  by 
express  companies,  153;  express  collec- 
tion envelopes,  153,  154. 

Express  Money  Orders,  122 ;  form,  122. 


THE   INDEX 


265 


FOREIGN  Bills  of  Exchange,  see  Ex- 
change. 

Foreign  Drafts,  see  Drafts. 
Forms,  I.,  outline  for  a  letter,  iz ;  II.-IV., 
headings  of  letters,  14;  V.-VIIL,  forms 
of  salutation,  15;  IX.,  model  letter,  18; 
X.,  forms  of  address  on  the  envelope,  19; 
XL,  addressed  envelope  of  introduction, 
20 ;  XII.-XIIL,  letters  of  introduction,  ax; 
XIV.,  letter  of  recommendation,  22 ;  XV. 
-XVIIL,  friendly  and  business  letters, 
27-29;  XIX.,  a  telegram,  31;  XX.,  night 
lettergram,  31; XXI.,  illustration  of  tele- 
graphic code,  32  ;  XXII. ,  bill  of  goods,  34; 
XXIII.,  bill,  35;  XXIV.,  assignment  of 
account,  35 ;  XXV.,  invoice,  37 ;  XXVI.- 
XX  VII.,  invoices  with  terms  of  discount, 
37,  38;  XXVIII. -XXXII.,  statements 
showing  debits  and  credits,  39-43; 
XXXIII.,  bill  showing  discount,  44; 
XXXIV.,  statement  of  account  paid,  45  ; 
XXXV.,  credit  memorandum,  46; 
XXXVI.-XLVL,  receipts,  47-50;  XLVIL, 
ordinary  order,  50 ;  XLVIII.,  order  pay- 
able in  cash,  50;  XLIX.,  due  bill,  51;  L., 
bank  deposit  slip,  57;  LI.,  check  with 
coupon,  58  ;  LIL,  checks  payable  to  cash, 
59 ;  LIIL,  checks  for  less  than  one  dollar, 
60 ;  LIV.,  check  specifying  for  what  used, 
6 1 ;  LV.,  checks  incorrectly  drawn,  62  ; 
LVL,  checks  correctly  drawn,  63  ;  LVIL, 
indorsed  check,  64  ;  LVIII.,  check  similar 
to  draft,  67 ;  LIX.,  check  payable  to  order 
of  signer,  68 ;  LX.,  certified  check,  69 ; 
LXL,  certificate  of  deposit,  70;  LXIL, 
indorsed  check,  72 ;  LXIII.,  promissory 
note,  78  ;  LXIV.,  partial  payment  of  note 
indorsed  on  back,  79;  LXV.-LXVIIL, 
kinds  of  indorsements,  81  ;  LXIX.,  de- 
mand note,  82 ;  LXX.,  so-day  note  pay- 
able to  bank,  84 ;  LXXL,  bank  notice  for 
note  due,  86;  LXXIL,  certificate  of  pro- 
test, 87 ;  LXXIII.-LXXIV.,  notices  of  dis- 
honor, 88 ;  LXXV.,  bond  of  indemnity, 
90;  LXX VI.,  note  with  date  of  payment, 
92 ;  LXX  VII.,  indorsement  of  partial  pay- 
ment on  note,  92  ;  LXX VIII.,  simple  paid 
indorsement  on  note,  93 ;  LXXIX.,  judg- 
ment note,  96;  LXXX.,  promissory  note, 


Forms  —  continued. 

97;  LXXXL,  joint  note,  98;  LXXXIL, 
joint  and  several  note,  98;  LXXXIIL, 
collateral  note,  99;  LXXXIV.,  note  pay- 
able by  installments  TOO;  LXXXV.,  note 
payable  on  or  before  certain  date,  100; 
LXXXVL,  produce  note,  100;  LXXXVIL, 
drafts  payable  at  sight,  107;  LXXXVIIL, 
accepted  draft,  108;  LXXXIX.,  bank 
drafts,  in  ;  XC.,  request  for  a  draft,  112  ; 
XCL,  application  for  money  order,  119; 
XCIL,  fees  for  money  orders,  120 ;  XCIII., 
postal  money  order,  121 ;  XCIV.,  Ameri- 
can Express  Company  money  order,  122 ; 
XCV.,  letter  of  credit,  125 ;  XCVL,  letter 
of  credit  sent  by  mail,  126;  XCVIL,  a 
travelers'  check,  127;  XCVIII.,  original 
and  duplicate  foreign  drafts,  128;  XCIX., 
petition  for  opening  street,  132;  C.,  peti- 
tion to  school  board,  133;  CL,  petition  to 
governor,  133;  CIL,  heading  for  sub- 
scription paper,  133;  CIIL,  proxy,  134; 
CIV.,  power  of  attorney,  134  ;  CV.,  revo- 
cation of  power  of  attorney,  135 ;  CVL, 
inside  cover  of  commercial  agency  ref- 
erence book,  136 ;  CVIL,  key  to  reference 
book  of  commercial  agency,  137  ;  CVIII., 
page  of  commercial  agency  state  ref- 
erence book,  138  ;  CIX.,  notification  sheet 
of  commercial  agency,  139 ;  CX.,  alphabet 
for  brush-marking,  142 ;  CXI.,  shipping 
order,  147;  CXIL,  shipping  receipt  or  bill 
of  lading,  148;  CXIII.,  railroad  memoran- 
dum, 149;  CXIV.,  railroad  expense  bill  or 
freight  bill,  150;  CXV.,  railroad  manifest, 
151 ;  CXVL,  Adams  Express  collection 
envelope,  153;  CXVIL,  United  States 
Express  C.  O.  D.  envelope,  154  ;  CXVIIL, 
bill  of  lading  to  which  draft  is  attached, 
156 ;  CXIX.,  draft  to  be  attached  to  bill 
of  lading,  157;  CXX.,  shipping  invoice, 
158;  CXXL,  contract  to  perform  work, 
165;  CXXII.-CXXIIL,  lease  (front  and 
back),  166-167;  CXXIV.-CXXV.,  notice 
to  quit  (front  and  back),  168-169  ;  CXXVL- 
CXXVIIL,  guaranties,  172  ;  CXXIX.,  bill 
of  sale,  173;  CXXX.,  short  form  bill  of 
sale,  173;  CXXXI.-CXXXIL,  bond  for 
fidelity  of  clerk  (front  and  back),  174-175  ; 


266      A  FIRST  BOOK  IN  BUSINESS  METHODS 


Forms  ^-continued, 

CXXXIIL,  bond,  177;  CXXXIV.,  prices 
on  Chicago  Board  of  Trade,  188;  CXXXV., 
prices  on  New  York  stock  exchange, 
193;  CXXXVI.,  prices  of  bonds,  194; 
CXXX VII.  -CXXX VIII.,  articles  of  co- 
partnership, 198-199;  CXXXIX.,  notice  of 
dissolution,  201 ;  CXL.-CXLL,  warranty 
deed,  214-215;  CXLIL,  quit-claim  deed, 
218;  CXLIIL,  signature  of  person  who 
cannot  write,  219;  CXLIV.,  trust  deed, 
222;  CXLV.,  note  secured  by  mortgage, 
223 ;  CXLVI.  (a)  and  (b),  mortgage,  224- 
225;  CXLVIL,  chattel  mortgage  note, 
226;  CXLVIIL,  satisfaction  of  mortgage, 
228;  CXLIX.,  assignment  of  mortgage, 
230;  CL.,  meridian  and  base  lines,  235; 
CLI.,  township,  236;  CLIL,  section,  236; 
CLIIL,  measurement  of  irregular  tracts 
of  land,  237;  CLI V.,  short  form  of  will, 
243- 

Frauds,  statute  of,  182. 

Freight   or   Expense    Bills,   railroad,  149- 
150. 

Futures,  187. 


GENERAL  Warranty  Deed,  217. 
Government  Bonds,  192. 
Grace,  days  of,  82. 
Grain,  cash,   187. 
Grantee,  216. 
Grantor,  216. 
Guarantee  Policy,  216. 
Guaranties,  171-172  ;  forms,  172. 


HEADING,  of  a  letter,  12,  13;  punctu- 
ation of,  13  ;  forms,  14. 
How  to  Make  Change,  140. 


TNDEMNITY,  bond  of,  91,  122. 

Indorsement,  of  checks,  64-65 ;  of  notes, 
79-80,  93;  forms,  81 ;  of  drafts  "for  col- 
lection," 109 ;  of  money  order,  121. 
Inland  Bills  of  Exchange,  129. 
Inspection  and  Grading,  189. 
Insurable  Interests,  see  Insurance. 


Insurance,  202-209  ;  fire,  203  ;  companies,  203- 
204 ;  policies,  204-209 ;  insurable  interests, 
204-205 ;  risks,  206 ;  proportion  of  insur- 
ance to  value,  207-208. 

Interest,  on  deposits,  54  ;  rates  of,  54-55,  84  ; 
dates  of  reckoning,  54-55  ;  simple,  83 ; 
compound,  83;  date  of  maturity,  84-85; 
table  of,  91 ;  merchants'  rule  for,  95. 

Invoices,  35-38  ;  corrected  and  duplicate,  36- 
38 ;  forms  of,  37-38 ;  forms  showing  dis- 
count, 37,  38;  shipping,  158. 

"Ironclad,"  or  judgment,  notes,  96-97. 

JOINT  Makers  of  a  Note,  81. 
Joint  Notes,  98. 


LiDING,  bills  of,  see  Bills  of  Lading. 
Landlord,  168. 

Land  Surveying,  United  States,  234- 
240 ;  surveying  meridians,  234  ;  base  lines, 
234 ;  townships,  234-235  ;  sections,  236-238  ; 
ranges,  234-235  ;  lands  not  included,  238. 

Leases,  166-172 ;  forms,  166,  167 ;  forms  of 
notice,  168,  169;  repairs  and  subletting, 
170-171 ;  notice  to  quit,  171 ;  guaranties, 
171-172. 

Legal  Tender,  139-140. 

Lessee,  168. 

Lessor,  168. 

Lettergram,  30-31. 

Lessor,  168. 

Letters,  of  introduction,  20-21 ;  of  recom- 
mendation, 21-22. 

Letters  of  Credit,  124-127  ;  forms,  125,  126. 

Letter  Writing,  11-33- 

Liability,  of  partners,  199-200. 

Limitations,  statute  of,  91. 

Limited  or  Special  Partnership,  201. 

"Long,"  brokers'  phrase,  187. 

Lost  Notes,  90-91. 


MAKER,  of  a  check,  59. 
Manifest,  railroad,  150-151. 
Margin,  of  a  business  letter,  16. 
Market  Quotations,   185. 
Marking  Goods,  private  codes,  140-141. 
Maturity,  date  of,  84-85. 


THE  INDEX 


267 


Memorandum  of  Credit,  see  Credit. 
Merchandise  Sales,  182-190.    See  also  Sales. 
Merchants'  Rule  for  Computing  Interest, 

95- 

Meridians,  surveying,  234. 
Money,  telegraphing  of,  122. 
Money  Orders,  post  office,  118-121 ;  forms, 

119,  120, 121 ;  express,  122 ;  form  of  express 

order,  122. 
Mortgagee,  226. 
Mortgages,  223-231;   as  security  for  note, 

223  ;  ordinary  form,  224-225 ;  defeasance, 

226 ;  real  estate,  226  ;  chattel,  226 ;  chattel 

note,   226 ;   satisfaction  of,  227 ;   form  of 

satisfaction,   228 ;   recording  of,  226-227 ; 

payments  on,  227-229  ;  assignment  of,  229; 

redemption  of,  229-231 ;    foreclosure  of, 

229-231. 

Mortgagor,  226. 
Mutual  Insurance  Companies,  203-204. 


PARTIAL    Payments,  92-93 ;   United 
States  rule  for,  93. 
Partners,  silent,  197;   nominal,    197; 
liability  of,  199-200. 

Partnership,  196-201 ;  dissolution  of,  200-201; 
notice  of  dissolution,  201 ;  limited  or 
special,  201. 

Payee,  of  a  check,  60 ;  of  a  draft,  106. 

Pen  Lettering,  141-142. 

Petitions,  132-133. 

Phrases,  commercial  words  and,  list  of,  254- 
262. 

Policies,  insurance,  204-209;  open  and  val- 
ued, 204 ;  guarantee,  216. 

Post-Dated  Checks,  66. 

Premium,  in  insurance,  202. 

Probate  Court,  244. 

Produce  Exchange,  186. 


NEGOTIABLE  Notes,  80-81. 
New  York   Stock    Exchange,   table 
of  prices,  193. 

Night  Rates  for  Telegrams,  30. 

Nominal  Partner,  197. 

Notes,  promissory,  77-82 ;  forms  of,  78,  79, 
82,  84,  86,  87,  93,  96,  97,  98,  99,  100 ;  indorse- 
ment of,  79-80 ;  forms  of  indorsement,  81  ; 
negotiable,  80-81 ;  joint  makers  of,  81 ;  de- 
mand, 82;  accommodation,  89-90;  lost, 
90-91 ;  outlawed,  91 ;  "  Ironclad,"  or  judg- 
ment, 96-97;  joint,  98;  collateral,  98-99; 
special  points  about,  100-102  ;  secured  by 
mortgage,  223,  226. 

Notice  and  Protest,  86-88. 

Notice  to  Quit,  171 ;  forms,  168,  169. 

Notification  Sheets  of  Commercial  Agen- 
cies, 137-139;  form  of ,  139. 

Nuncupative  Wills,  241. 


OBLIGEE,   173. 
Obligor,   173. 

"Old  Line"  Insurance  Companies, 
203-204. 

Orders,  50 ;  forms,  50. 
Orphans'  Court,  244. 
Outlawed  Notes,  91. 


Q 


UIT-CLAIM  Deed,  217. 

Quotations,   market,  185 ;   of  stocks 
and  bonds,  192-194. 


RAILROAD  Business,  147-161;  bills  of 
lading,  147-149;  memorandum.  149; 
expense  bills,  149-150;  manifests,  150- 
151;  bill  of  lading  with  draft,  155-158; 
shipping  invoice,  158. 

Ranges,  in  surveying,  234-235. 

Rates  of  Interest,  54-55. 

Real  Estate  Mortgage,  226. 

Receipts  or  Vouchers,  47-50;  forms,  47-50. 

Recording  of  Deeds,  220-221. 

Redemption,  of  mortgage,  229;  equity  of, 
229-230. 

Reference  Books  of  Commercial  Agencies, 
I37~139- 

Registered  Packages,  123. 

Registrar  of  Deeds,  221. 

Repairs  and  Subletting,  170-171. 

Right  of  Dower,  217,  242. 

Risks,  insurance,  206. 

Rules,  United  States  rule  for  partial  pay- 
ments, 93 ;  merchants'  rule  for  comput 
ing  interest,  95. 


268      A  FIRST  BOOK  IN  BUSINESS  METHODS 


SAFETY  Deposit  Vaults,  72-73. 
Sale,  bills  of ,  172-173. 
Sales,  merchandise,  182-189  ;  stoppage 
in  transitu,  184 ;  common  carriers,  185 ; 
market  quotations,  185 ;  boards  of  trade, 
186-187;  sales  and  values,  187-188;  brok- 
ers— bulls  and  bears,  188;  inspection  and 
grading,  189;  bucket  shops,  190. 

Salutation,  in  a  letter,  12,  15  ;  forms,  15. 

Satisfaction   of  Mortgage,    227-229;   form, 
228. 

Savings  Banks,  54. 

Sections,  in  surveying,  236-238  ;  form,  236. 

Settling  of  Estates,  244-246. 

Shareholders,  190. 

Shares  of  Stock,  190. 

Shipping  Order,  147;  receipt, 148-149;  memo- 
randum, 149;  invoice,  158. 

"Short,"  brokers'  phrase,  188. 

Signature,  of  a  letter,  12,  17 ;  form,  -17. 

Signs  used  in  Business,  list  of,  250-253. 

Silent  Partner,  197. 

Simple  Interest,  see  Interest. 

Sinking  Fund,  190. 

Statements  of  Account,   45-46;   forms,  39, 
40,  41,  42,  43,  45. 

Statute  of  Frauds,  182. 

Statute  of  Limitations,  91. 

Stock,  preferred,  191;  common,  191;  certifi- 
cate of,  190. 

Stock  Companies,  190-191. 

Stock   Exchanges,  192;  New  York,  193-194. 

Stocks  and  Bonds,  191-192;  exchanges,  193; 
value  of  quotations,  192;  tables  of  prices, 

iQ3»  *94. 

Stoppage  in  transitu,  184. 
Subletting,  170-171. 
Subscription  Paper,  heading  for,  133. 
Sureties  to  a  Bond,  176. 
Surety  Companies,  178. 
Surrogate  Court,  244. 
Surveying,  United  States  land,  see  Land 

Surveying. 


of   Interest    and    Statute     of 
Limitations,    91 ;    table  of    time  in 
days,  94. 
Telegrams,     29-33;    cable    messages,    30 

forms,  31. 

Telegraphic  Codes,  32. 
Telegraphing  Money,  122. 
Tenant,  168. 
Testator,  242. 
Testatrix,  242. 
Time,  table  of,  94. 
Title,  abstracts  of,  213-216. 
Title  Guarantee  Companies,  216. 
Titles,  in  the  address  of  a  letter,  14 ;  general 

directions  for  use  of,  22-23. 
Townships,  234-235 ;  form,  236. 
Trade,  boards  of,  186-189.    See  also  Boards. 
Trade  Discount,  38-42. 
Travelers'  Checks,  127-128. 
Trust  Deeds,  221-222  ;  form,  222. 
Trustee,  221-222. 

UNITED     States     Express     Company 
C.  O.  D.  envelope,  154 
United  States  Land  Surveying,  234- 
240.    See  also  Land  Surveying. 
United  States  Rule  for  Partial  Payments, 

93- 
Usury,  95-96. 

VALID    Consideration,    necessary   to 
contract,  163. 
Voucher  Check,  70. 
Vouchers,  see  Receipts. 

WARRANTY  Deeds,  see  Deeds. 
Wills,    241-248;   kinds  of,  241-242; 
making  of,  242 ;  short  form,  243 ; 
witnesses    to,    243-244 ;    executor,    242 ; 
duties  of  executor,  244 ;   administrator, 
244-245  ;  settling  of  estate,  244-246. 
Witnesses,  243-244. 

Words  and  Phrases,  commercial,  list  of, 
254-262. 


WHERE    THE    MIND    AND    HAND 
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THE  SELDEN  SERIES  OF  MANUAL 
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freight.  The  book  has  the  hearty  indorsement  of  rail- 
road men  everywhere. 

Fully  illustrated.     Cloth.     Price  $1.25 

RAND   McNALLY  &  COMPANY 

CHICAGO  NEW  YORK 


THIS  BOOK  IS  DUB  ON  THE  LAST  DATE 
STAMPED  BELOW 


FEB    7    1916 
DEC 


->MM  20 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


